A Chinese shop owner recently talked to me about how he ended up getting given fake money, and also after my last video many people were surprised to see the machine at the shop that checks cash to see if it's real or not, is fake and counterfeit money really such a big problem in China? Is it getting any better? How can you tell if the cash you've been given is real or fake? Watch this video to find out!

When paper money was introduced in China in the 13th century, wood from mulberry trees was used to make the money. To control access to the paper, guards were stationed around mulberry forests, while counterfeiters were punished by death.

In the 1990s, the portrait of Chairman Mao Zedong was placed on the banknotes of the People's Republic of China to combat counterfeiting, as he was recognised better than the generic designs on the renminbi notes.

Some of the ill-effects that counterfeit money has on society include a reduction in the value of real money; and increase in prices (inflation) due to more money getting circulated in the economy - an unauthorized artificial increase in the money supply; a decrease in the acceptability of paper money; and losses, when traders are not reimbursed for counterfeit money detected by banks, even if it is confiscated.

Traditionally, anti-counterfeiting measures involved including fine detail with raised intaglio printing on bills which would allow non-experts to easily spot forgeries. On coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, it does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold. In early paper money in Colonial North America, one creative means of deterring counterfeiters was to print the impression of a leaf in the bill. Since the patterns found in a leaf were unique and complex, they were nearly impossible to reproduce.

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Music used: Tourach/Chaos Theory