A counterfeit banknote detection pen is a pen used to apply an iodine-based ink to banknotes in an attempt to determine their authenticity. The ink reacts with starch in wood-based paper to create a black or blue mark but the paper in a real bill contains no starch, so the pen mark remains unchanged.

Counterfeit banknote detection pens are used to detect counterfeit Swiss franc, euro and United States banknotes, amongst others. Typically, genuine banknotes are printed on paper based on cotton fibers and do not contain the starches that are reactive with iodine. When the pen is used to mark genuine bills, the mark is yellowish or colourless.

Such pens are most effective against counterfeit notes printed on a standard printer or photocopier paper.^[1] The chemical properties of US banknotes printed before 1960 make marking pens useless, resulting in false positives.^[2] One example of this complication taking place happened in 2016, in which a 13 year-old student was arrested by police after she attempted to pay for lunch with a red seal Series 1953 $2 bill after the school's counterfeit pen was unable to prove its authenticity.^[3]

Pen manufacturers claim such pens will detect a great majority of counterfeit bills and are an easy counterfeit detection method that does not require expensive gadgets.^{[citation needed]}

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