Cyphernomicon Index
Cyphernomicon 10.9

Legal Issues:
Legality of Digital Banks and Digital Cash?


   10.9.1. In terms of banking laws, cash reporting regulations, money
            laundering statutes, and the welter of laws connected with
            financial transactions of all sorts, the Cypherpunks themes
            and ideas are basically _illegal_. Illegal in the sense that
            anyone trying to set up his own bank, or alternative currency
            system, or the like would be shut down quickly. As an
            informal, unnoticed _experiment_, such things are reasonably
            safe...until they get noticed.
   10.9.2. The operative word here is "launch," in my opinion. The
            "launch" of the BankAmericard (now VISA) in the 1960s was not
            done lightly or casually...it required armies of lawyers,
            accountants, and other bureacrats to make the launch both
            legal and successful. The mere 'idea" of a credit card was
            not enough...that was essentially the easiest part of it all.
            (Anyone contemplating the launch of a digital cash system
            would do well to study BankAmericard as an example...and
            several other examples also.)
   10.9.3. The same will be true of any digital cash or similar system
            which intends to operate more or less openly, to interface
            with existing financial institutions, and which is not
            explicity intended to be a Cypherpunkish underground
            activity.


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