The formula of the additive is now a secret waiting to be stolen. Interesting technology, though I don't get why it's introduced today, since it looks like something that could have been easily implemented 10 or even 20 years ago.
So, why today? Cost effectiveness of the technology? Political decisions?
A bit like the UK MoD taking on a weapon when the real market is to sell the weapon to other countries. It's a way for the UK government to support UK industry.
The Royal Mint is the world's leading exporter of currency selling to over 60 countries, and this is their sales pitch for the next 30 years.
By securing the use of the technology in the coinage of the UK as early as possible, they are able to use that as a strong signal to other countries in the future who are assessing their coinage needs.
The UK taking on this coin now, is a sales pitch. An effective one.
Patents.
The second part of why now is that they've patented all of this. The replacement cycle for coinage is long (30+ years), and if they fail to make significant sales in the next 15 years they are not going to be getting significant benefits from their patents.
They need to get as many sales in the next 15 years as possible to have effectively used the period of exclusivity the patents granted.
Of course if you're sophisticated enough, or have the right connections, any security scheme is breakable. It's probably been introduced because the salesman from the company that produces coins pushed it as the solution to widespread counterfeiting of £1 coins. At present people make really rudimentary fakes from things like painted lead, which they pass off as real.
For those who produce the additive and detection machines of course, this will be a bonanza - I wonder whether the ink company also sells detection mechanisms? It'll be interesting to see how many vendor machines simply move to using cards instead in response - why bother buying a new detection mechanism when you could just stop accepting coins? I can imagine London Underground doing this in a few years for example.
At present machines and people go on form and weight, if the bank can add a certain response to UV or radio to that, it might make it significantly more difficult to copy the coins. I imagine the response of forgers to this will be to develop a UV coating to be screened on to coins which will fool machines (which are going to be pretty basic), rather than trying to mimic the material itself. Many machines will never use the much trumpeted benefits of this system, because it'd be too expensive, they'll probably just go on shape and weight as usual.
These clunky coins are going to be extinct in a few decades anyway though - governments already issue more of their currency in electronic form than physical coin, and I suspect most people will happily use the internet and cards for everything and drop cash and cheques. At that point physical currency will be withdrawn, because it is such a burden to produce and police, I'm not even sure if you need a replacement token which can be shuffled around like bitcoin, or if everyone will be happy using verified transactions and ledgers as they do at present with banks. So the mint will eventually be out of business except in selling commemorative coins.
And, given the claim "built in technology for high speed authentication and verification everywhere from ATMs to vending machines and point-of-sale."*, they will have to go to extraordinary measures to prevent the secret from being leaked.
The skeptic in me thinks the only real way to prevent fake coins (or bank notes) from entering circulation is to make production more expensive than their nominal value (that approach is economically valuable because one could see the loss of value of a coin when recycled as a tax on each transaction. Let's say a one pound coin costs 1.5 pounds to make, with half a pound of raw materials, so that 1 pound is lost over its lifetime. In 30 years, that coin may change hands, 5000 times, so that the loss per transaction is .02 cents)
You could make it expensive to make a coin by putting more than the nominal value worth of raw material in each coin, but that, obviously, is a bad idea for a different reason: people would recycle the money.
So, a solution must be sought in making it hard to make coins. Any complicated technology will work.
The mentioned electroplating method might be such a technology. I think it might even be possible to write a pattern over the surface of the coin by using techniques similar to those used in chip making. Unbeatable? No, but it might drive the cost of counterfeiting a coin up enough to kill the market, that is, until somebody figures out a cheap way to replicate the technology, or until somebody finds a just good enough approximate technology that beats the scanners.
It's not even being introduced today - it won't be released until 2017. I believe that's mainly because every machine that accepts the £1 coin has to adapt. Apparently that's going to cost £20 million.
>> "The formula of the additive is now a secret waiting to be stolen."
True but it's possible that this, plus the strange physical design of the coin, could increase the cost of counterfeiting to make it unprofitable.
An Australian company was selling "trade secret" additives as an anti-counterfeiting measure that they said were unique to each client... but were actually bought in bulk from China and could easily be reverse engineered.
