Just as the realization grows that the global market has moved from rhetoric to reality and that the Information Standard has replaced the gold-exchange standard, we are faced with another new situation--the advent of multiple forms of digital cash on smart cards and on the Internet. As in ancient times, anyone can announce the issuance of his or her brand of private cash and then try to convince people that it has value. There is no lack of entrants to operate these new private mints ranging from Microsoft to Mondex, and more enter every day. While e-cash is not legal tender, it is nonetheless being accepted in payment by ordinary people. If people believe that bits and bytes arranged in a certain way have value, it can be argued that what they pay and receive is money. This trend poses complex new policy problems for us all. "A commerce whose primary form of money is data," David Bollier [7]  has written, "alters many of the implicit assumptions we have about contemporary organizations."

Today when money laundering is a major activity for drug lords, and, it is said, for some political contributions, some forms of e-cash present major problems for law enforcement officials. Governments will want audit trails, but individuals may want privacy. While large money transfers are presently encrypted, the widespread use by individuals of cyphers with good security, which used to be the exclusive province of the sovereign, poses new public policy questions. The intersection where the advocates of individual privacy meet the guardians of national security is a hotly contested area. "Privacy," in the great phrase of Kevin Kelly [8] , "is a type of information that has its polarity reversed." With good security freely available on the Internet and in many places overseas, our government's efforts to block its widespread use is a losing game. Of course an old-fashioned letter with no return address offers great security and privacy, but is unsuited to the kinds of volumes and velocity required by global commerce.

The legal situation of venue on the net is also murky. No consensus has emerged as to what nation's laws would apply for transactions in cyberspace. As a recent U.S. Treasury study dryly put it, "Nation states may find unilateral enforcement of electronic money-related rules difficult" [9] . Since any product of the mind can be communicated as a stream of digital bits, the situation grows more complex. One thing is certain: at the end of the day the value of a currency rests on the productive capacity of the people who use it. In today's world that productive capacity rests, to a large extent, on the fact that information applied to work is creating wealth. As Bill Frezza [10]  has pointed out, if ordinary people are able to create and exchange wealth on the Internet, "the underlying products of their creative output upon which the value of money will be based may never exist in the physical world. And since that wealth may not have to be exchanged for government fiat currency in order to be useful, there may be scant opportunity to seize it." It is not beyond the realm of possibility that counterfeiters of e-cash could create their own mints, that hackers can and will break encryption systems said to be secure, and that tax collectors will be frustrated as they attempt to move through cyberspace.

[7] Bollier, D. (1997) The Future of Electronic Commerce. Aspen, Colo.: Aspen Institute: 27.

[8] Kelly, K. (1994) Out of Control: The Rise of a Neo-Biological Civilization. Reading, Mass.: Addison-Wesley: 212.

[9] U.S. Treasury (1996) "An Introduction to Electronic Money Issues." Paper prepared by staff from the U.S. Department of the Treasury for a Treasury conference on "Toward Electronic Money & Banking: The Role of Government," Washington, D.C., 19-20 September: 33

[10] Frezza, B. (1997) "The Internet and the End of Monetary Sovereignty." In J.A. Dorn (ed.) The Future of Money in the Information Age, 29-33. Washington, D.C.: Cato Institute: 32.