Report: Security chips could be embedded in euro notes

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As the clock ticks down to the official introduction of the single European currency, word is out that the new banknotes could eventually contain a high-tech security feature meant to foil counterfeiting.

The European Central Bank (ECB) is seeking proposals from semiconductor makers for RFID (radio frequency identification) chips that would be embedded in euro notes to prevent counterfeiting, according to a report published online in Electronic Engineering Times, citing unnamed inside sources.

A spokesman for the ECB, which is overseeing the replacement of 12 national currencies with the new money, said he could not immediately confirm the reports. But the ECB has frequently referred to "state-of-the-art" anti-forgery measures in the new notes, including raised print, watermarks and hologram strips.

Bankers are concerned that the cross-border use of the money, and its likely adoption outside the European Union as a reserve currency, could tempt forgers and money launderers. In particular, 200 and 500 euro notes are expected to be a tempting alternative to US$100 bills for forgers.

ECB is working with Germany's Infineon Technologies AG and the Netherlands' Philips Semiconductors NV on the project, the reports said.

Infineon has conducted tests on its RFID chips to see whether they would be suitable for implementation in paper money, said company spokesman Reiner Sch

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