Janie Slaven: LEFT TO MY OWN DEVICES: When cash was, or will again be, king

Feb. 1—For as long as I can recall, the threat that some sort of replacement for currency or coins has seemed imminent. It's come in fits and starts. At one point, the penny was the choice target. There seemed to be some logic to that after the nostalgia of penny candies, gumball machines, and whatever a penny arcade may have been all went into hiding in the wake of global inflation and simple cost-of-living forces made their use nearly laughable.

Since the Coins Act of 1792 established the U.S. Mint, and it pressed its first one-center the following year, the penny's purpose has waned. According to the Mint, it takes more than two pennies to produce one these days. It's a metaphorical lens through which you can judge governmental bureaucracy and consumer savvy. Over eight billion pennies were lost to the process, meaning that taxpayers blew through $83 million in the upside-down production process. A penny for your thoughts?

It's not only the irony of spending two cents to create one, which can be used for not much more than squaring a cash transaction these days, that may make coins and currency passé. Just about every denomination has been on the block. Despite technological advances in fighting against counterfeiting, hundreds and twenties notoriously are prone to fraud.

Specialized ink was just the beginning. Now, fluorescent threads are woven into fivers up to hundos. Spectrophotometers help merchants quickly identify bad notes when the pink, red, blue, yellow, or green threads are missing or not found in their rightful note. There are watermarks, raised printing, and the ever-present serial numbers, themselves, all working toward thwarting those who prefer printing bills rather than earning them. Each one of those costs us, and nary is the "solution" that cannot be overcome with equally savvy, albeit malicious, technological invention.

The U.S. Office of Justice Programs also warns against counterfeit coin stamping. This, I was quite surprised to learn of. Who in their right, or criminal, mind would endeavor to replicate a quarter for cry-eye?! Enough of a contingency, I suppose, that a formal report exists on the topic. My hunch is that these master casters are likely to home in on the rare coin market rather than molding and pouring pounds of dimes every day.

On top of the age-old counterfeiting risks, the expenses inherent to producing coins and currency, and the invisible hand's influence over the paper and metal disc values, the forces of technology are affecting our holistic use and understanding of money.

For generations there have been ways to transfer money without actually exchanging tangible artifacts. Though the New York and Mississippi Valley Printing Telegraph Company, known to you and me as the Western Union Company, never realized its telephonic dreams, it's been integral to communications, and to money transfers, for over 150 years. It was only around 15 years ago that it was still known as "the world's largest money-transfer business." By the next day, after The New York Times published that posit, or shortly thereafter to take the hyperbole out, PayPal, Zelle, and many that you and I may have never heard of—Azimo; CurrencyFair; InstaReM; OFX; Xoom; et al—have all infiltrated the Western Union business, related.

In any case, whether it's a wacky sounding company or the staid Wester Union folks, sending money without touching it has been part of all our lives and that of at least a generation or two before us. Nowadays, though, it's wildly different than the ol' Wild West's transfers. Well, it's not paradigmatically different. There's still the risk factor, albeit digital now rather than stagecoach-y back then.

According to a State of Financial Crime 2023 Report, an industry publication, money laundering, alone via these technological risks cost society $15 trillion in 2015 and is estimated to tally $10.5 trillion by 2025. In pennies, that's incalculable, or at least imperceptible. Note that's only the laundering shenanigans. Add to that all sorts of other malfeasance and you're talking about losses that rival some of the biggest economic producers on the planet.

With all that risk attendant to digitizing money, you'd think that in this case old skool is the best school: hard currency. Not so much.

In fact, with our proclivity for e-payments, and those generations to come ballooning that yen to greater thinness, society wants little to do with tangible payment forms. J.P. Morgan drafted a report about China's use of electronic payment systems and concluded that they are "highly sophisticated shoppers," and that is clear since its 1.4 billion people, who produce $12.2 trillion in commerce each year, use e-commerce solutions for $1.2 trillions in transactions annually. You can see with a 2-3% fee attached to each how PayPal and its ilk are eager to take over the Western Union services. Here in the States we're not quite that advanced, and the U.S. Government is intent to keep currency secured.

We're investing as much as ever into technologies to thwart counterfeiting. The Treasury Department's Bureau of Engraving and Printing has been actively pining for investments into new tech to tamp down old criminal habits. They're angling to incorporate the same technological leverage toward identifying counterfeit ploys as the criminals levy to dupe merchants in the first place.

There are aims to create device-assisted ways, from private industry, to "become distinctive counterfeit deterrents incorporated into the banknote" that your smartphone, or that of a merchant, could use to vet the artifact. They have sights on new solutions not reliant on any devices, too.

Whether hard currency, or e-commerce, the mainstay since time immemorial has been the opportunistic, consummate criminal. Money is as good a test bed as any, so with it and anything of informational value, buyer beware. It's us, we humans, in any security discussion that present the greatest risk, after all.

Ed Zuger is a professor of cybersecurity, an attorney, and a trained ethicist. Reach him at edzugeresq@gmail.com.