--- begin forwarded text Date: Tue, 21 May 1996 23:35:22 +0900 To: rah@shipwright.com From: tatsuo@glocom.ac.jp (Tatsuo Tanaka) X-Sender: tatsuo@izanagi.glocom.ac.jp Subject: Reply to e$: The Wealth of Nation-States Cc: tatsuo@glocom.ac.jp (Tatsuo Tanaka) MIME-Version: 1.0 Dear Mr. Robert Hettinga, Please allow me to write you. I am a visiting research fellow of Columbia University, and study digital cash from the economics point fo view. I read your article on "e$:The Wealth of Nation-States." ineterestingly. I also think that digital cash will cause a conflict with the Nation-States, though my major concern is financial economics view point, not taxation problem. I wrote a paper on this issue,"Possible Economic Consequences of Digital Cash " which is supposed to be presented at the coming INET96. This paper's URL is http://tenjin.glocom.ac.jp/tanaka/inet/DigitalCash_v1e.html I hope this paper might be of interest to you. Following is an abstract of this paper. Author discusses possible consequences of digital cash from the view of economics and forcasts a possible scenario for the future. Digital cash will bring us benefits as well as problems. One major benefit of digital cash is its increased efficiency which will open new business opportunities, especially for small businesses. On the other hand, it will bring us four problems: taxation and money laundering, instability of the foreign exchange rate, disturbance of money supply, and the possibility of financial crisis. There is one important attribute of digital cash, however, that overshadows these benefit and problems. It is the transnationality of digital cash, that is, the ability of digital cash to flow freely accross national borders. Every bank can issue it and everybody all over the world can use it. This transnationality is a cause for both benefits and problems, and could have significant repurcussions internationally. From the economic stand point, the most important characteristic of digital cash is its transnationality. If digital cash circulated only within a traditional national border and was controlled under a central monetary authority, there would be no economic implications that would be worth analyzing. In this case, digital cash would be nothing more than a convenient transaction method such as a credit card. However, digital cash is more than that. Its transnationality has the potential to cause conflict between cyberspace and nation states. If digital cash spreads successfully in the 21st century, its history may be written as a record of its battle with nation states. Thank you for your time. Sincerely yours, Tatsuo TANAKA Tatsuo Tanaka Email:tatsuo@glocom.ac.jp -Current Address- -Contact in Japan- Center on Japanese Economy & Businness Center for Global Communications 521 Uris Hall International Univ. of Japan Columbia University 6-15-21, Roppongi,Minato-ku New York, NY, 10027, USA Tokyo 106,Japan Fax:+1-212-678-6958 Tel:665-5028 Fax:+81-3-5412-7111 Tel:5411-6677 --- end forwarded text ----------------- Robert Hettinga (rah@shipwright.com) e$, 44 Farquhar Street, Boston, MA 02131 USA "If they could 'just pass a few more laws', we would all be criminals." --Vinnie Moscaritolo The e$ Home Page: http://thumper.vmeng.com/pub/rah/