James O'Connor (Cork East, Fianna Fail) | Oireachtas source

I support the Bill which updates Irish law to reflect four pieces of EU legislation in the area of counterfeiting. These changes will give the requisite powers and functions for the Central Bank of Ireland to monitor and enforce measures related to suspected counterfeit euro currency. As the effective branch of the European Central Bank here the Central Bank of Ireland requires the power to check euro notes and coins we all use without thinking. The crime of counterfeiting money is as old as money itself. For as long as people have been using negotiable instruments other people have been attempting to create fraudulent versions of them. There has been a significant increase in the volume of counterfeit money due to the enhancement of technology graphics, software and high-quality low-cost colour printers, meaning that even an amateur can produce possible counterfeit notes easily through unprotected transaction points that are not equipped to detect them.

No business owner wants to absorb the loss due to counterfeit money. Such losses if occurring on a regular basis can lead to an increase in prices for consumers. Having counterfeit money in circulation is harmful to the economy and undermines the credibility of our currency, the euro, which has national and international effects. The focus of the directive is the creation of criminal offences of making, uttering or importing counterfeit currency, and possessing instruments and security features for making counterfeits. Such action requires co-operation between national authorities in the European Union, the Commission and the European Central Bank.

Thankfully, the number of counterfeits detected as a percentage of the genuine bank notes in circulation is at a very low level. However, 308,000 counterfeit euro bank notes were withdrawn from circulation in the second half of 2019. That represents an increase of 22.7% when compared with the first half of 2019 and is 17.6% more than the second half of 2018, indicating that it is a very serious issue. Therefore, continual updating of the legislation is required to ensure that the integrity of the euro as a means of exchange and as a store of wealth is protected.

We are also living in an era where currency is modernising with the potential inclusion of digital currency becoming more mainstream. As the Minister of State is aware there has been a large increase in digital transactions since the onset of Covid-19 to stop the spread of the virus and protect our essential workers through the reduction of the use of cash. In recent times the European Central Bank has investigated the use of a digital currency. Digitalisation has spread to every corner of our lives and transformed how we pay for our goods and services. In this new era, it is critical that we guarantee that citizens in the euro area can maintain costless access to a simple universally accepted safe and trusted means of payment.

In recent times we have seen the advent of cryptocurrencies and volatility in their value. We must ensure that a digital currency, when it becomes available, does not have that level of volatility. We must also ensure that digital currencies have the necessary safeguards in place to prevent counterfeit technology. Cryptocurrencies fluctuate in value due to their decentralised nature but are less likely to get hacked as a consequence. A centralised ledger used by digital currency would be more prone to cyber attack due to its single point use. Therefore heightened cybersecurity would be required to ensure that such digital currencies would be protected. This is the future and we must stay one step ahead of it.

The counterfeiting of cash does not hurt those involved in organised crime and big business. It is always the smaller people who get hit hard, including local businesses in our towns and villages. It could be independent bookmakers, for example. There are multiple examples of individuals who are at risk because of this. Based on my research having spoken to people and business owners in my community, this legislation is timely and needs to be enacted. We need to be more proactive and progressive in how we deal with the ever-changing money landscape. Obviously, the advent of cryptocurrencies will bring enormous pressures on the regulating authorities that have responsibility in these areas. We in Ireland need to start to get our act together.

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