[MLB-WIRELESS] FW: [eclectika] there goes the cash economy

[Tracey.Simon at csiro.au]

Euro Scheme Makes Money Talk  By Janis Mara

Story location: http://www.wired.com/news/privacy/0,1848,59565,00.html
02:00 AM Jul. 09, 2003 PT

Euro cash could be embedded with radio frequency identification tags if 
a reported deal between the European Central Bank and Hitachi becomes 
reality.

The bank is working on a hush-hush project to embed RFIDs, wireless 
transponders the size of a grain of sand, into the fibers of euro bank 
notes to foil would-be counterfeiters. The bills currently have a 
number of security marks, including threads that glow under ultraviolet 
light, but as the euros wear thin, these are less perceptible.

If the deal goes through, it will be a boon to the nascent RFID 
industry, which has long been in search of a market. However, consumer 
privacy advocates have questions about other possible uses of the tags.
A spokesman for the ECB in Frankfurt confirmed on July 4 that the bank 
intends to add further protection to the euro and that the next series 
will incorporate updated features, "because technology is advancing 
rapidly and you have to keep pace with that."

The spokesman, Jean Rodriguez, stopped short of identifying the new 
features or their makers, saying all contracts with third parties are 
subject to strict confidentiality agreements.

A Hitachi spokesman acknowledged awareness of the ECB project, but said 
his company was under a nondisclosure agreement and could not confirm 
whether Hitachi would provide RFID chips for the bank, which released 8 
billion euros in January 2002. The deadline for the project has been 
reported as 2005.

Privacy groups have expressed concerns about the use of RFIDs, both in 
bank notes and other areas. Earlier this year, an announcement that 
Italian clothing manufacturer Benetton Group would use the chips to 
track its garments set off a firestorm of media coverage and a 
threatened boycott due to concerns about consumers' privacy. Benetton 
retracted its plans.

If embedded in the euro, the chips could make it possible to track 
information such as when and where transactions take place, according 
to Paul Lee of Deloitte Research in London.
RFID technology involves a minuscule chip and antenna, which would be 
implanted in the bank notes, and a reader similar to those used with 
bar codes, only much smaller, Lee said. Though it might be used simply 
to identify the note's serial number, it would also be possible to add 
more data.

"There is a worry in our field as to how these things will be used, 
given the lack of coherent privacy regulations," said Dan Moniz, staff 
technologist for San Francisco's Electronic Frontier Foundation, a 
digital watchdog organization.
"It would be easy to establish a system where intelligence agencies 
track how money is spent. What if I'm an ethnic Turk in Germany, where 
there is a long-standing conflict between the Turkish and German 
populations, and I buy books on establishing a Turkish state?" Moniz 
asked.

"The German police could start tracking me. If I go to France or 
another country that is part of the 12 member nations using the euro, 
the German police could notify the French police, and they could keep 
track of me," Moniz said. The 12 nations that use the euro are Italy, 
Luxembourg, the Netherlands, Spain, Portugal, Ireland, Greece, Germany, 
France, Finland, Belgium and Austria.

Until now, Moniz pointed out, the only truly anonymous form of payment 
has been cash. "If you write a check, the instrument itself bears your 
name and other data. Credit cards have an obvious audit trail; 
traveler's checks have one as well. But always, until now, cash 
payments have been mostly untraceable."

Another leading privacy advocate is also concerned about the 
information being collected in databases and used for marketing 
purposes -- or even lawsuits, health insurance applications and law 
enforcement.

"This private data can be used against you," said Katherine Albrecht, 
founder and director of Consumers Against Supermarket Privacy Invasion 
and Numbering. Albrecht said she shares EFF's concerns. "It will 
essentially eliminate the anonymity of cash." She outlined a nightmare 
scenario in which "it would be possible to track all the cash issued to 
an individual and invalidate it with a couple of keystrokes" -- a 
literal case of "your cash is trash."

Despite the reputed deal between the ECB and Hitachi initially reported 
by Japanese news agency Kyodo, technical difficulties may forestall the 
use of the tags in the euro.

"A bank note is very thin," said Bodo Ischebeck, senior director of 
Ident-Systems at Infineon Technologies in Munich. "Bank notes have a 
thickness of only about 80 microns, and the technology is only capable, 
if you are connected to an antenna and have a chip on the bottom, at 
100 microns." The paper would have to be 100 microns thick, Ischebeck 
said, to support the technology.

Also, Ischebeck said, the wear and tear bank notes undergo, such as 
accidentally being put through the washing machine or sitting for hours 
in the sun, is "not semiconductor-friendly."

Infineon conducted several research projects about a year ago on the 
feasibility of including semiconductors in bank notes, Ischebeck said, 
though he would not confirm whether the ECB project was one of them.
The Auto-ID Center at the Massachusetts Institute of Technology 
estimated that RFID tags cost from 20 cents to $1. This would make the 
tags impractical for use in denominations lower than 200 and 500 euros, 
worth roughly $200 and $500, respectively.

Though the EFF's Moniz said he has no doubt the ECB is implanting RFIDs 
in euros simply to thwart counterfeiting and money laundering, "it's 
not a one-use technology. It opens the door to other things. We need to 
examine the possible scenarios and what we can do about them. Society 
needs to have a debate about this."


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