In a sense it already has. We can now track balances and transfer money between accounts with our ATM cards and even buy stocks on our desktop PCs. But everyone from bankers to software makers is counting on doing much more. Consider Microsoft chief Bill Gates. When Microsoft bought Intuit, the market for the software maker’s Quicken personal-finance program was only half the attraction. What really enraptured Gates were the electronic money systems to which such programs will increasingly connect-such as the digital charge card Microsoft is developing with Visa.
But electronic commerce demands true e-money. What we have so far are ways of making payments electronically. They fit one definition of money-a fast and efficient medium of exchange. They don’t fit two others–a store of wealth; and the ability of bills to be interchangeable with each other. That’s what gives cash its anonymity. E-money must replicate that. We don’t want governments, companies, market researchers, direct mailers or the tax man to have ready access to the trail our cybercash leaves. We also need to be sure our e-money is secure from fraud. If someone can encrypt e-money, you can bet someone else will try to crack the code.
If the Internet is ever to become the cybermall some dream of, then someone will have to create e-money for your electronic wallet. A cyberbuck is only a string of 0s and 1s; the trick is getting other people to accept your 0s and is, just as you accept the bills that the government issues. Companies like Cybercash in Vienna, Va., and Digleash in the Netherlands are working on solutions that function like digital tokens for the Infobahn.
The consequences of global e-money will change your life. And not just because of the convenience. It will change the way we’re governed, When printed money supplanted coins from royal mints, it shifted power from kings to banks–and the parliaments that could borrow from them. Similarly, once e-money truly arrives, it will shift power from national governments to heaven knows where. No government will tolerate that, of course, Your virtual wallet may soon be here, but so will the Virtual Fed to regulate it.
