Final answer:
Currencies are equipped with advanced security features like diffraction gratings and thin film interference effects, as well as traditional methods like reeded coin edges, to prevent counterfeiting. With global digitization, there's a shift towards less reliance on physical currency, but its security remains crucial.
Step-by-step explanation:
Prominent among these features is the implementation of a diffraction grating, a tool that creates a complex pattern of lines or markings that are very hard to replicate. For example, Australia's polymer banknotes include this protective measure, which significantly increases their security against forgery. New Zealand and Taiwan have adopted similar technologies. In contrast, U.S. currency employs a thin film interference effect, another sophisticated method to deter counterfeiting. Another historical but less technological example is the practice of creating ridges on the edge of coins. This was done to prevent the clipping or shaving of precious metal from the coin's perimeter, a way to cheat the system before modern banknotes. These ridges, or reeded edges, make physical alterations to the coin easily detectable. Security features in currency have evolved significantly since early forms of money, such as cowrie shells. As the global economy becomes increasingly digitized, there is a shift towards digital payments, reducing the reliance on physical currency. However, as paper and coin money continue to circulate, these innovative security features are essential in maintaining the integrity of global currencies.