Richard D. Porter

Estimating the Worldwide Volume of Counterfeit U.S. Currency: Data and Extrapolation

The incidence of currency counterfeiting and the possible total stock of counterfeits in circulation are popular topics of speculation and discussion in the press and are of substantial practical interest to the U.S. Treasury and the U.S. Secret Service. This paper assembles data from Federal Reserve and U.S. Secret Service sources and presents a range of estimates for the number of counterfeits in circulation. In addition, the paper presents figures on counterfeit passing activity by denomination, location, and method of production. The paper has two main conclusions: first, the stock of counterfeits in the world as a whole is likely on the order of 1 or fewer per 10,000 in both piece and value terms; second, losses to the U.S. public from the most commonly used note, the

The efficiency and integrity of payment card systems: industry views on the risks posed by data breaches

20, are relatively small, and are miniscule when only counterfeit notes of reasonable quality are considered.

Currency Ratios and U.S. Underground Economic Activity

To examine the adequacy of existing efforts to prevent, manage, and mitigate data breaches and other fraud in card-based payment systems, the authors conducted 17 interviews of various payment industry participants in 2009. This article documents the insights gained from the interviews, which consider the need for greater cooperation, sharing of relevant information, and innovation to stay ahead of the criminals that perpetrate payment card fraud with increasingly sophisticated methods.

Reinventing Money and Lending for the Digital Age

Cagans classic currency ratio suggests that underground economic activity in the U.S. surged starting in 1994. In contrast, we show that a ratio adjusted to take care of two distorting developments--retail sweep programs and overseas demand for U.S. currency--did not surge, and that movements in the adjusted ratio are owed primarily to the differential effects of interest rates on currency and checkable deposits. As a result, we are skeptical of monetary-based claims that the underground economy has expanded significantly in recent years and believe that any claims that it has must rely on other evidence.

Transforming Payment Choices By Doubling Fees on the Illinois Tollway

Bitcoin and other privately created digital currencies are beginning to challenge central banks’ monopolies on money creation. These decentralized cryptographic payment media could ultimately displace legacy banking, finance, and Payment services at a lower cost across the globe. These currencies are likely to continue experiencing a faster rate of improvement than traditional payment media and require less force for safekeeping. This chapter explores some of the forces that led to the rise of Bitcoin including the ball-in tax on deposits during the Cyprus banking crisis in 2013. We also examine the relative stability of Bitcoin as a store value. We also consider new internet-based P2P lending arrangements using Bitcoin rather than dollars as a payment media. Finally, we reassess Stanley Fischer’s criticism of Hayek’s competitive private currency proposal in light of Bitcoin and other open source digital currencies.