As just about everybody knows paper currency is printed somewhere and distributed through some chain that typical ends with the new bills going from an ATM, bank teller, or retailer into the hands of an individual.
What you probably know but haven't put together in context is that the combination of automated bank scanners with simple web style OLTP means it's easy to track the path each bill takes as it leaves and enters the banking system. Think in terms of google's buzz maps or any of the other internet connectivity maps you've seen and you'll get the idea: a particular bill is first issued to Joe at this ATM and time, gets deposited by Jane at this bank and time, gets re-issued to Dick at this place and time, gets re-deposited etc and so on.
What you may not know, however, is that it's possible to go beyond that to look at where the cash goes between issuance and re-deposit.
If, for example, you focus tracking on bills moving in and out of banks in a particular region, and then further limit your scope by looking only at issuance to people thought to have drug connections and deposits from retailers and those same individuals, you will typically create a thin map that enters a kind of steady state after perhaps eight months to a year.
To improve on that map you sample bills to test for contaminants - and if you find that bills released to Joe tend to have more cocaine when redeposited by Jane's Casino and Bar; well then you know where to look, don't you?
This seems reasonable, unobstrusive, and even laudable in a drug enforcement context - but it's been possible for some years now to go well beyond this simply by seeding some bills with markers that transfer first to the person handling them and then to other bills that person handles.
So if your friendly neighbourhood VAT enforcers arrange for Joe to get some contaminated bills and Joe uses some of the cash to pay Dick for some home improvement work, Dick handles it along with the cash he got from Harry, and some of it later appears in deposits from Sally, Home Depot, and Superfoods - then they'll eventually be able to build up a a fairly detailed map of the cash economy.
That map will have holes in it - but if they grab up some of the players and talk them, they'll get most of those filled in.
You have to be paranoid not to think this all good stuff - it is, after all, a simple combination of high school science with off the shelf IT and analysis gear deployed in the interest of law enforcement - but although I personally favor stocking and advancing nuclear weapons too, this is one of those times when we should ask ourselves, as the IT guys who make all this stuff possible, Dr. Oppenheimer's most often misquoted question: just what horrors have we let loose on the world?