A few weeks ago, the US Bureau of Engraving and Printing — the folks responsible for printing US paper currency — took the wraps off the refreshed $100 bill due to enter circulation in February 2011. It has a slew of new security features, including a 3D security ribbon, designed to better thwart counterfeiting. The BEP also seems to think the new $100 bill looks better than its predecessor. But in both respects the new bill is a disaster.

As long as the old $100 bills remain in circulation and remain legal tender, the new bills will have a limited effect on counterfeiting. Any criminal sophisticated enough to forge the non-trivial security features of pre-2011 $100 bills — such as the watermarked paper or color shifting ink — are probably smart enough to continue counterfeiting the pre-2011 notes. After all, as long as their forgeries are good enough and the old $100 bills remain legal tender, retailers and other parties have no choice but to take the risk that someone passes them counterfeit currency. The less sophisticated criminals who use scanners and inkjet printers, or other equally crude measures, are likely thwarted by the watermarks and microprinting alone.

The BEP and others argue that, due to wear and tear, the old $100 notes will eventually fall out of circulation, mitigating this issue. But there are two problems with this argument. First, even if the vast majority of $100 bills in circulation are of the new design, it does nothing to change the fact that US law mandates all currency ever printed remains legal tender indefinitely. So criminals have no reason to stop forging the older notes. Nor does the new currency really increase their probability of being caught

Second, unlike smaller denomination bills, the $100 bill does not experience a whole lot of wear and tear. Even today banks issue their customers $100 bills from the late 1980's or early 1990's — bills designed in the pre-Photoshop era — because so few people use $100 bills in quotidian transactions. Hence, even if this argument holds water, it would take such a long time for this phenomenon to manifest itself that it's moot. By the time counterfeiters feel compelled to forge the new notes, technology will probably have advanced to the point it's not that much of a deterrent.

The Bank of England has a much more sensible policy with respect to this issue. They're currently on the verge of switching in a new £20 note in the UK. But rather than leave the note to "organically" go out of circulation, they've mandated that 60 days after the new note is issued shop owners and other parties are no longer legally obliged to take the new £20 as payment. And, for those people who don't exchange their notes immediately, the Bank of England agrees to exchange old £20 notes for new £20 notes indefinitely. Counterfeiters are thwarted at shops, since owners don't have to accept the old notes and the new notes are difficult to forge, and they're further deterred from forging old notes as the Bank of England can more readily detect subtle forgeries of less secure notes than bank tellers or clerks.

Then there's the issue of the new $100 bill's design. It's absolutely hideous: more a haphazard pastiche of various images than something coherent. The front of the note is now graced by the aforementioned 3D security strip, which runs right down the middle of the bill, intersecting Ben Franklin's shoulder. It's definitely not subtle. The front is also covered by a mishmash of words, letters and numbers in a goldenrod that does not go well with green. A giant "100" in a similarly unpleasant hue dominates the back, printed in such large type the digits are probably visible from the International Space Station on a clear day.

In one sentence, the new $100 bill looks more like Monopoly money than something that stands as a symbol for the power of markets and capitalism.

It's not impossible to design an attractive, secure currency. The Euro has had a 3D security strip, a polychromatic look and other security features new to US currency for years. And I would contend that the Euro notes are far more attractive than US currency writ large. (Note that, for instance, the Euro notes come in different physical sizes — the 5€ note is smaller than the 200€ note — which obviates the need for features like the gigantic "100" for low vision people and allows the blind to pay with cash without the risk of being swindled.) The Bank of England has also managed to incorporate many of the features found in the new $100 bill into their new £20 note without making it hideous.

Fortunately I tend to transact with my debit or credit card, especially for large purchases, so I suspect my exposure to the new $100 bill will be limited. But even if I don't use the new notes, counterfeiting harms me and many other consumers and businesses. And, as something that stands as much as a symbol as it serves a set of economic functions, the BEP ought to have spent the time and money to make the new notes attractive. Perhaps we'll have better luck when the $100 receives another facelift in another 10 to 15 years.