There seem to be different standards of counterfeit money, depending on the degree of professionalism of the counterfeiters. Highly professional counterfeiters are international operators, just as likely to be making their fakes in Italy or Russia as in Spain. But new technologies such as scanners have opened up criminal possibilities to what we could call "domestic" forgers. It is even common to find banknotes which are evidently no more than photocopies. 

The legal tender banknotes in Spain are of 1,000, 2,000, 5,000 and 10,000 pesetas (roughly, 5, 11, 27 and 54 dollars), while the coins are of 5, 10, 25, 50, 100 and 500 pesetas. The larger banknotes, 5,000 and 10,000 pesetas, are the obvious targets for professional counterfeiting, while your down-home, rough-and-ready forger seems to have a preference for the 2,000-peseta note, which you are likely to be given as part of your change and not scrutinize. Even coins may be forged and not crudely. If you are trying to buy, e.g., cigarettes from a vending machine and it does not accept 500-peseta coins, it is because the machine has been deliberately adjusted to reject them – they are a favourite of counterfeiters. 

The fake coin is the one on the left and is actually a much better forgery than is shown by this scanned image. It could be identified by: 1. The biggest giveaway is the sound it makes: being essentially painted lead, it does not clink like a real coin nor rattle when dropped on a surface such as a bar counter. Some bartenders toss them in the air and listen for the absence of the whistle. 2. This forgery is evidently some years old and is beginning to lose some paint - in fact, if you hold it in your hand for a couple of minutes, it will be stained. 3. The edge was probably bevelled originally, like the real coin, but is now smooth.

Banks, of course, are legally obliged to take counterfeit money out of circulation – vox populi says they do not do so and stories abound of false notes being found in money dispensed by ATMs. 

One word of advice: you may find yourself faced with a man on the street offering to change your money for you - and at a terrific exchange rate. Resist the temptation: he is very likely to give you counterfeit money.

So what should you do if you find yourself in possession of evidently counterfeit money in Spain? Do you behave as you would at home, report it to the police or hand it in to the bank? Keep it as an expensive souvenir? Or adopt local customs and follow the example of the waiter at the beginning of this story, passing it on to another innocent? Spain and Portugal for Visitors makes no recommendation.