There are two legal problems that I could see being used against digital cash. The first is the civil war era prohibition on banks issuing private bank notes. This was done in an attempt to force people to switch over to U.S. government notes, and was successful. (Actually, it is not a pro- hibition per se, but rather a prohibitive tax on the use of such notes.) I don't have a reference to where this actually appears in the code, but I have read about it in many histories of currency in the U.S. It seems to me that digital cash issued by a bank is functionally very similar to a paper bank note issued by that same bank, suggesting that this law would apply. The second problem is the regulation of "scrip" and barter systems. This was pointed out on the list last year by someone who had actually been involved in a private barter or scrip system which was shut down by the government, at great cost to all concerned. These regulations can be found at 26 CFR 1.6045-1. From subsection (f)(5)(ii), "Scrip is a token issued by the barter exchange that is transferable from one member or client, of the barter exchange to another member or client, or to the barter exchange, in payment for property or services". I think this one will eventually get the "NetBank" people in trouble. (You call a 900 number and in exchange for a charge on your phone bill they give you a digital token you can exchange for property or services by participating merchants.) Barter exchanges are required to get the names and SS numbers of all participants and report their transactions to the IRS. This would be inconsistent with the privacy we seek from ecash. There are probably other regulations but I would think these two would have to be addressed initially, at least by anyone thinking of setting up these services within the United States. Hal