You have probably seen this sticker or some variant of it--though you may not have properly noticed it or read what it said--on a vending machine in Japan. It is almost ubiquitous these days.

It tells you that the vending machine will accept new 500 yen coins, but not old ones. That's because old 500 coins were susceptible to easy counterfeiting, especially in vending machines.

Today, as a follow-up to Dom's wonderful guide to Japanese coins, let's learn a bit about the history of counterfeit 500 yen coins in Japan.
First, let's take a look at the difference between the old and new 500 yen coins:
With minor changes most easily seen from an angle, the new 500 yen coins can be distinguished from their older counterparts by the filled in zeroes and serrated edges, old coins having smooth spaces inside the zeroes and smooth edges. As Dom noted in his article, there are also letters spelling out "NIPPON" written in tiny font inside the digits, though it takes time to pick them out with the naked eye.

This "new" 500 yen coin came out in late 2000, having been hastily issued by the Japan Mint in response to a social problem that erupted in the late 90's.
(Incidentally, said mint's coin production branch just so happens to be a few minutes' down the street from my house.)

So what was this social problem?

Well, it turns out that the old Japanese coin, by complete chance, was exactly the same size and composed of exactly the same alloy as the Korean 500 won coin. Though the two coins aren't so hard for a person to tell apart, to a machine the only discernable difference between these coins was a slight variation in weight.
Left: 500 won coin; Right: old 500 yen coin
This side looks similar, but the pictures on the reverse are very different.
Of course, the other major difference between these coins is their value. The 500 won coin was at the time worth only about a tenth of the 500 yen coin. That left a sizable 450 yen difference between the two.

Entrepreneuring young counterfeiters, upon discovering this bit of happenstance, went to work. The fruits of their labor were a very clever, and very illegal, method of extorting cash a little at a time from vending machines across the country. (Read on in part 2!)

Wow! What a lengthy and comprehensive article! Stay tuned for the exciting conclusion on Monday! Follow us on Facebook and Twitter for the update. :)

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