Aside from the legal and moral issues, if a counterfeit coin is indistinguishable from a mint-made coin, is it less valuable or desirable? There are probably hundreds of counterfeits that are currently accepted as genuine, and may never be detected as counterfeit. At what point do they actually become real? I'm thinking Colonials, Half Cents, Large Cents and early silver with wear obliterating key identifying points. Other coins are felt to be counterfeit but can't be proven to be so and are accepted as real, e.g., the 1959 Wheat Cent. If collectors, dealers, graders, the Mint and the Secret Service can all be fooled, then it seems that a counterfeit can actually be as good as, and equal to a genuine coin. In my (probably not shared) opinion, if you are collecting for value and resale (investing) then accurate counterfeits may be a problem, but if you are collecting for visual pleasure then the design is what counts and an accurate copy is probably good enough. I have counterfeits (cearly marked as such) in my type set simply because I can't afford an original example in any condition greater than P1. For what it's worth, I have no problem with identifying counterfeits with COPY. I don't feel it should be as large as currently required; I think it should be laser micro-etched at a specific place on the coin, say at 6 o'clock on the obverse, just inside the rim, or inside the O of STATES OF AMERICA. This would be small enough to be clearly visible only under magnification - something like the ways diamonds are etched with ID numbers on their edge.
While I wholeheartedly disagree with your idea regarding the marking of copies - the idea is to mark them in such a way that it is easily visible with the naked eye; I can't fault your reasoning otherwise. It is much like what I say about artificial toning. That being - if you can't tell, then does it matter ? But with counterfeit coins, I have never heard of a case where you couldn't tell.
Reminds me of this quote by master forger Mark Hofmann: "If I can produce something so correctly, so perfect, that the experts declare it to be genuine, then for all practical purposes it is genuine."
England is have a big time problem with counterfeit 1 pound coins. A few weeks back they found a shipment of the 2006 & 2009 1 pound coin. 80 million box and ready to dump ,that not chump change! I agree with Doug said 99% are noticeable to collectors.
