From: jdd@aiki.demon.co.uk (Jim Dixon)
Date: Tue, 9 Aug 94 06:48:22 PDT
To: cypherpunks@toad.com
Subject: Re: e$
Message-ID: <4591@aiki.demon.co.uk>
MIME-Version: 1.0
Content-Type: text/plain


In message <9408072158.memo.40958@BIX.com> peace@bix.com writes:
> I can recall that many years back the casinos in Las Vegas all
> accepted the chips from the other ones and then had a great
> exchange each day where the accounts were settled up.  Even the
> gift shops took chips in place of cash.  The US Treasury put a stop 
> to this as it was considered to be a replacement for cash.
> 
> Also I hear a lot about bearer bonds, but never in the US.  OTOH
> the NYC subways have started a cash card that they expect merchants
> to accept in lieu of coins.  It would be nice to know what the Feds
> will or won't accept.  BTW, does it matter if the e$ are US denominated?
> Could e$ be presented as travelers checks?  The possibilities here are
> extremely interesting.

There is a small point to be made here which I think is really a big
point.	The US government does not object to the use of financial
instruments so long as they are backed by the US $ (or another
accepted currency).  Most of us use such financial instruments daily
-- checks and credit cards, for examples.  Most financial transactions
involve no cash at all.

If an e$ is backed by US $1.00, the government will not object.  The
government objects if you create an alternative currency.  Barter
systems based on scrip are an alternative currency, and therefore
illegal.

If you had $1,000,000 in the bank and wrote out and signed 1,000,000
checks for $1.00 each, I think that these could be traded without
violating any laws.  But if you issue $e carelessly, you will probably
find that you are acting as a bank, and therefore violating several
Federal laws.  You also need to be concerned about Federal regulations
covering the import and export of money.  I think that at $5,000 or
$10,000 you have to report the transaction.  I believe that the forms
issued on airplanes make it clear that checks and other financial
instruments are included.

The action taken to stop the exchange of tokens between casinos would
seem to contradict this.  It would be useful if someone were able to
find more information on this.	The legal point might be that the
tokens simply had an amount written on them ("$100) with no currency
specified and without the name of a bank directed to pay this amount
-- having said this, I am reasonably sure that they would not allow
banks to pay out against their tokens, and so therefore they would
definitely represent an alternative currency, and not an IOU.
--
Jim Dixon