Counterfeit USD is really common, most of the people getting burned by having it passed to them (in the US) are sex workers and massage places that double as sex work.

There's lots of folks who print them, some decent ones sell bills on Tor but if you want the good stuff you need to do some digging.

I've never made it myself but I've handled it and I don't really know how people would catch it, other than the ones that repeat the same sequence of serial numbers and shit.

Even countries with crazy security in their bills get counterfeited successfully, Australia comes to mind and while it's really rare I've seen counterfeiters make some generations of their bills.

Ultimately, it's not a terrible idea for states to move to centrally-issued digital currencies that reuse blockchain technology. It doesn't have to be as bottlenecked as the fully decentralized ones and they can obviously reverse transactions in this scenario, and the mining isn't trustless so there's no ridiculous energy waste.

In theory it would also enable a socialist state to crack down immediately on any financial impropriety. Citizens could even be afforded some reasonable amount of privacy by reusing elements of ring signature schemes, but eg only allow a certain $ value per person per time period to be submitted with private spend outputs. Some moving dollar amount could almost certainly be calculated that mimicks what people usually spent privately (eg with cash) today, so it doesn't freak the libertarians out too much. Anything you're paying with a bank or pay card or app today is already fair game for the state to vacuum up and analyze, so I don't think shifting to a digital currency needs to be that scary for people. USians will shit blood if it resembles the Digital Yuan though, I stand by the privacy provisions.