From: Jim McCoy <mccoy@ccwf.cc.utexas.edu>
Date: Wed, 23 Jun 93 09:37:57 PDT
To: cypherpunks@toad.com
Subject: Re: Digital Cash$$$$
In-Reply-To: <9306231547.AA13751@eagle.fsl.noaa.gov>
Message-ID: <199306231637.AA28018@tramp.cc.utexas.edu>
MIME-Version: 1.0
Content-Type: text


> From: bear@eagle.fsl.noaa.gov (Bear Giles)
> 
> Phil Karn writes:
> >
> >Recall that the US has money-laundering laws that require you to file a
> >form every time you move $10,000 or more in or out of the country. [...]
> >
> >It's an interesting question whether they could then get you for sending
> >more than $10,000 of digital cash across the border without filing the
> >form. It's even more interesting if you encrypt all these cross-border
> >transactions...
> 
> This could tie a lawyer up in fits, because even if you sent digital
> cash across the border, you could still produce a _spendable_ copy
> in the originating country!  In fact, you could have the same 'bill'
> residing on media in a dozen countries!

Not only that, but a digital cash certificate, unlike regular cash, can be
cut up into little segments that each have no value other than being random
numbers.  You send one segment to each of various accounts arond the world
and then reconnect the segments at some site located in a country with weak
banking regulations...

An idea I had for this digital cash stuff that might be a little easier is
to consider some of the nations within the borders of the U.S.  The various
Native American tribes have a degree of semi-sovereignty that may allow
them to get away with something like this.  This would make things easier
for using this system in the U.S. because it would be fairly trivial to get
the reservations on to the net if they are not already.  The advantage for
those running such a cyberbank is that they would get connected, and get
machines to do this stuff, and the rest of us would effectively be paying
them to do so :)  [it probably would not be a hard sell, but the question
is whether or not the various tribes have enough sovereignty to get away
with it.]

It is things like this that probably give regulators fits.  IMHO, the real
reason governments are opposed to strong cryptography is that in an
information society it effectively places the population outside the
control of the government, the central government becomes superfluous.

jim