The Bank of England turned the watermark into a currency-security feature, adopting watermarked banknote paper in 1697 after its notes were counterfeited

Roughly four centuries after the watermark appeared as a papermaker's brand (Fabriano, 13th century), the same physical trick was repurposed as anti-counterfeiting technology. The Bank of England, founded in 1694, issued paper banknotes that were counterfeited soon after; according to American Banker, "after some were counterfeited in 1695, the Bank of England had to find a way to secure them," and beginning in 1697 the Sutton Courtenay Mill manufactured watermarked paper with a loop pattern for the Bank's smaller-denomination notes.

The shift is one of function, not mechanism: the mark is still an image formed in the substance of the sheet, visible against light and integral to the paper — but its purpose moved from private branding (identifying the mill) to public verification (proving a note was genuine, i.e. issued by the authority whose paper carried the mark). The security value is exactly the property that made it a good maker's mark: hard to reproduce without the mould, invisible to casual inspection, impossible to add after the fact.

The move also opened an arms race. By the 1790s, per the same American Banker feature, watermark counterfeiting had itself become a tool of political sabotage (English papermakers sympathetic to loyalists forging the light-and-dark watermarks of revolutionary French currency) — the same attack-and-defense cycle that later recurs around machine-text watermarking (claim-kirchenbauer-2023-green-red-list-llm-watermark and its paraphrasing attacks). The full 750-year through-line is drawn in observation-watermark-same-provenance-mechanism-paper-to-llm.

Why this note is seedling and flagged. The episode is uncontested history, but the specific dates (1694 founding, 1695 counterfeiting, 1697 adoption) and the Sutton Courtenay attribution rest on a Tier-3 trade feature; under sources.md's quantitative floor these want a primary source (Bank of England archive or a numismatic history). The numbers are recorded but flagged [unverified-quant — needs primary]; verification is routed at question-verify-bank-of-england-1697-watermark-adoption-primary.

Update 2026-07-12 (cross-model audit): the 1694 issuance and 1697 adoption dates now carry Tier-2 corroboration — the British Association of Paper Historians states "The Bank of England has been issuing bank-notes since 1694, with simple watermarks in them since at least 1697" (https://baph.org.uk/resources/paper-history/history-of-papermaking-in-the-uk/), which also records Henri de Portal taking over the watermarked banknote-paper contract in December 1724. The 1695 counterfeiting date and the Sutton Courtenay / Rice Watkins attribution remain on Tier-3 sourcing, so the flag and the routed question stay open for those specifics.