Good morning everyone,

Welcome to Portugal and to “The protection of the euro - The fight against counterfeiting and fraud on euro banknotes” seminar. 

Banco de Portugal organizes this seminar in partnership with the European Commission through the Pericles Programme, which aims to prevent and fight counterfeiting. 

I take the opportunity to congratulate the European Commission, not only for this specific Programme, but also for the several initiatives that it develops and supports in this field and to thank for the trust placed in Banco de Portugal in organizing this seminar. 

I would also like to thank the representatives of the national central banks here present, particularly: the representative of Croatia that, in 2023, will join the Euro, and the representative of Turkey, a country with a key role in the protection of the Euro. 

I also compliment the presence of the European Central Bank, the Europol and, naturally, the Judiciary Police, our long-time privileged partner with whom Banco de Portugal has a cooperation agreement in the field of the fight against cash counterfeiting and money laundering that has produced very good results. 

The goals of the Pericles Programme are aligned with the Strategic Plan of Banco de Portugal for 2021-2025, which has the objective: “To promote proximity and reinforce trust”, because the protection of the Euro benefits from the public’s confidence in euro banknotes and coins. 

In 2020, the Eurosystem has defined a strategy for cash with the commitment to ensure that all euro area citizens and companies continue to have access to cash and that it remains a widely accepted, sustainable and innovative means of payment. 

And why do institutions as different as the European Commission, the ECB, National Central Banks, not forgetting judicial and police entities, dedicate so much attention and effort to the protection of euro banknotes and coins? Because of its relevance: The Euro is the currency of 19 of the 27 countries of the European Union: soon there will 21, with Croatia joining in January 2023 and Bulgaria one year after. It is the world’s largest monetary union, with more than 340 million citizens. 

The Euro is the economic symbol of the European project and, along with the free movement of people and goods, a symbol of integration and cohesion. Moreover, it is the second most important currency in the world after the US dollar.

The end of cash has been announced for several years, but at least in the Euro area, banknotes and coins continue to play a central role. 

While its use as a means of payment declined during the pandemic, the demand for cash increased. Cash remains the dominant means of payment in the Euro area, with a clear majority of daily payments being made using banknotes and coins. 

Thus, preliminary results of the 2022 Euro area payment habits survey indicate that around 60% of payments at points of sale were made in cash. 

The net issuance of euro banknotes has shown, over the last ten years, a continuous and stable growth of around 5%. However, during crises, mostly financial crisis, the variations observed were very high and even exceeded 12%, in 2008, with the collapse of Lehman Brothers. 

In 2020, the first year of the pandemic, the reduction in consumption and the change in payment behaviour, partly due to fears of virus transmission through cash, have led to less use of cash in transactions and, consequently, to the decrease in the value of banknotes withdrawals in the euro area central banks. 

However, the value of deposits decreased even more, so the overall value of banknotes in circulation grew by 11%. 

In a context of crisis, this trend, common to all Member States, has demonstrated the importance of cash as a store of value. 

In 2021, the net issuance of banknotes continued to increase significantly, but at a slower pace, due to the gradual recovery of confidence and economic activity, more pronounced in the last semester. 

At the end of the year, 28 billion euro banknotes were in circulation, with a total value of 1.5 trillion euros. The ECB estimates that 30% to 50% of this value circulates outside the euro area, a number that has been increasing over the years. 

Although very residual compared to the number of banknotes in circulation, counterfeiting is a risk for states, due to the possible loss of confidence by citizens in their currency. 

The downward counterfeiting tendency in euro banknotes persisted in 2021, with another all-time low in the proportion of counterfeits to genuine banknotes in circulation. 

The total number of counterfeit banknotes withdrawn from circulation was 347 000, which means that only 12 counterfeits were detected in the course of a year for every million genuine banknotes in circulation. 

The quality of the counterfeits is still low, making detection fast and easy using the “touch, look and tilt” test. 

There is no doubt that the pandemic accelerated the digitalization of the economy and motivated new consumption behaviours that have reintroduce the debate about the place of cash in the digital economy, but the data I have just shared certifies the importance of euro banknotes and coins. 

The Board of Directors of Banco de Portugal values this mission area – Banknote Issuance – and has a very broad understanding of how we can and must protect the Euro and citizens against counterfeiting and falsification. The place where we are is a living example of this understanding. 

It is here, at the Carregado Cash Centre, that the functions attributed to Banco de Portugal that contribute to the protection of the euro are performed. The euro area banknote printer, Valora, and the Issuance and Treasury Department are located here, in this same building.

It is important to remember that the protection of the euro and the fight against counterfeiting is not limited to judicial and police activity! 

It starts with the design of a new banknotes with appealing designs and a selection of innovative and robust security features, still ensuring the production of sustainable banknotes with high quality standards. 

It is also about making sure that cash is accepted everywhere, securing the availability of euro banknotes and coins, its quality in circulation and the efficiency of recirculation. 

And, considering that there is no protection without knowledge, it is equally necessary to train citizens to check the genuineness of the euro banknotes and coins they receive and to learn the weaknesses of our currency by analysing counterfeit cash. Identifying the techniques used in counterfeiting and the simulated security features is essential for police investigation and also for the development of safer banknotes.  

To finish my intervention, I would like to reinforce that actions such as this make way to a shared knowledge and exchange of experiences, and contribute in a more decisive way to improve the effectiveness of the policies defined at national level by the different Member States. 

I wish you all a very fruitful seminar and an enjoyable stay in Portugal! 

Obrigado