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.