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The Risk of Counterfeit

When Australia's first decimal currency series was introduced in February 1966, the banknotes were thought to contain the most advanced security features available. The series included a watermark, metal thread, quality rag paper and sophisticated printing; however, by the end of the year the $10 banknote had been counterfeited. It became apparent that improved security features were necessary to impede counterfeiters and the Governor of the Reserve Bank, Dr HC Coombs, sought a long-term solution from Australia's scientific community, which was expanding its research capability at this time.

The Bank began a series of discussions with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) concerning the development of technology that would revolutionise the security of the banknotes. Included in the initial discussions were Dr Sefton Hayman, then Chief of the CSIRO Division of Applied Chemistry, and Professor David Solomon, who led the research team to its ultimate achievement.

The initial motivation was directed towards developing a banknote that could not be copied by counterfeiters through photographic means, while ensuring that forgeries would be recognised easily by the public. This focus lead to exploring the hologram-like optically variable device. As its name suggests, the device's appearance varies according to external changes, including the angle of viewing. Its integration with the banknotes meant that counterfeiters were unable to photograph them accurately, whereas they could reproduce banknotes with static images. The device produced better optical effects when applied within a smooth, transparent surface, contributing to the decision to develop a clear plastic film as the substrate to replace traditional, fibrous paper. Research was propelled during this period by awareness that improved reprographic technology was becoming increasingly available to the public. By 1974, the research had matured into the stage of experimental banknotes and the Bank officially engaged the CSIRO on the project.

In 1988 Australia became the first country to incorporate optically variable devices into its banknotes.

An experimental $50 banknote, 1985.

Reserve Bank of Australia Archives, NP-004655.

Source image of Captain James Cook's portrait by Nathaniel Dance (William Holl, engraver, and Fisher, Son & Co London, publisher) and negative with the optically variable device used in the commemorative $10 banknote, first issued in January 1988.

Reserve Bank of Australia Archives, NP-002847, NP-004390.

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