The September edition of the German industry magazine Die Bank contains renewed speculation about the introduction of spy-chips in the Euro banknotes. The article discusses three possible new measures against the counterfeiting of the notes; a new biological paint, a colour-switch foil and the introduction of RFIDs (Radio Frequency Identification Devices) on every note. The Hitachi Mu-chip, with its 0.18 micron size, is mentioned as a likely candidate, as reported earlier in EDRI-gram. Though the current price of approx. 7 eurocent per chip might be prohibitive, the article also mentions a new invention by Philips to integrate the chip in the paper completely.
The way the chip would work, is by storing a 38 digit number that cannot be changed later on, containing both the unique serial number and data about the origin of the note. The metal strip on every note could function as antenna. To function properly, all current notes (8.2 billion) would have to be replaced and every citizen should have access to readers, to verify the authenticity of each note. The author of the article doesn't mention the privacy risks attached to the distribution of readers on a massive scale; the fact that every potential criminal could secretly scan the contents of every wallet.
Sicherheits-Innovationen: Banknoten der Zukunft (September 2005)
http://www.die-bank.de/index.asp?issue=092005&art=417
EDRI-gram: New rumours about spy chips in Euro notes (26.01.2005)
http://www.edri.org/edrigram/number3.2/rfid