Adam Back wrote:
I think the thing that killed MT / digicash for this application was MT at the time was reported to be closing accounts related to pornography -- they apparently didn't want the reputation for providing payment mechanisms for the porn industry or something.
James Donald replied:
Payee traceability made it possible to close accounts related to pornography. Ecash is not truly cash like if the issuer can prevent it from being used by tax evaders, child pornographers, money launderers and terrorists.
Payee traceability had nothing to do with it. Every customer of MTB, whether an end user or a merchant, had to fully identify himself to the bank, including SSN and for merchants, type of business, etc. This is SOP for other payment systems like credit cards. It was on this basis that MTB was able to screen their merchants. No payee tracing was necessary. A fully untraceable cash system would have been equally amenable to merchant screening. Any vendor has the right to control whom it does business with, and MTB chose to exercise its discretion in this way. The Texas couple in the news recently made a different choice and decided to provide payment services for child pornographers, as James Donald recommends. Now MTB is still in business (after merging with MTL and then FSR) and the Texans are in jail. Which made a better choice?