Opportunities and Challenges of the U.S. Dollar as an Increasingly Global Currency: A Federal Reserve Perspective

Federal Reserve Bulletin, Sept, 2001 by Michael J. Lambert, Kristin D. Stanton

As the United States moves forward with new designs, public education programs will need to inform even larger segments of the public about the features of genuine currency. Despite the Department of the Treasury's efforts thus far to direct the public's attention to the features in new designs, poor-quality inkjet counterfeits are easily passed to the domestic public. As the Department of the Treasury introduces new currency designs in the future, it must also commit adequate resources to prepare and deliver effective public education and awareness programs. The goal of these programs should be to improve the public's knowledge about the distinctive feel of genuine U.S. currency and the full array of overt security features. (See box "Introduction of the Euro and Public Education.")

Introduction of the Euro
and Public Education

On January 1, 2002, the European Central Bank (ECB)
will introduce the euro as the official national currency
and coin for participating European Union (EU) countries.
Each of the twelve participating countries (Austria,
Belgium, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, and Spain)
may co-circulate national bank notes and coins and the
euro until February 28, 2002. Each participating country
has determined for how long (usually through December
31, 2002) its citizens can exchange national bank
notes and coins at depository institutions. Thereafter,
national bank notes and coins can be redeemed only at
branches of the ECB.

The introduction of 14.3 billion euro bank notes and
50.1 billion euro coins has prompted the ECB to launch
a massive public education effort, at a cost of about
80 million [European Dollar] ($69 million), called the
Euro 2002 Information Campaign. The campaign will concentrate on
four primary issues relating to the new bank notes and
coins: (1) design features, (2) public security features,
(3) denominations, and (4) details of the changeover from
national bank notes and coins to euros. Accordingly, the
ECB's campaign will attempt to eliminate questions and
confusion by delivering throughout the EU a consistent
message, which will include the following information:

* The euro will be physically available on January 1,
2002.

* The bank-note designs for participating countries are
identical.

* The eight euro coins will have twelve versions, each
with a national design of a participating country on one
side and a common EU design on the other side.

* The bank notes have state-of-the-art security
features.

* The decisions about how long each country's citizens
can take to trade ill their national bank notes and
coins at central bank branches (after the co-circulation
period) will be communicated.

The ECB's campaign is intended to reach the widest
audience possible, including partners in the changeover
effort, such as banks, retailers, tourism agencies, and
many other businesses.

In Section 807 of the Antiterrorism and Effective Death Penalty Act of 1996, the Congress imposed a requirement on the Department of the Treasury to report to Congress every three years through 2006 on the use and counterfeiting of U.S. currency abroad.(17) In complying with this requirement, which is aimed at maintaining the integrity of and public confidence in U.S. currency worldwide, the Department of the Treasury and the Federal Reserve established the International Currency Awareness Program (ICAP). Although ICAP was initially established to aid the international introduction of the Series-1996 currency design, its goals now include quantifying the amount of genuine and counterfeit U.S. currency circulating abroad. ICAP representatives conduct interviews with high-level contacts in foreign banking organizations and law enforcement agencies and assess regional and local capabilities of detecting counterfeit U.S. currency.