The Internet has lured both shoppers and business people to its online economy. When a user wants to purchase an item from a merchant, he simply sends the bank a special electronic message, encoded with a unique digital signature requesting the money. The bank debits the user’s account and sends “e-cash” to the users computer via the Internet. After receiving the e-cash, the user’s computer transmits it to the merchant’s computer, which verifies the authenticity of the “e-cash” with the bank and credits it to the merchant’s account. This move to a cashless society stretches the parameters of current legislation and legal precedent regarding the right of financial privacy. Congress must enact a new federal statute to balance the competing interests raised by digital cash. A viable digital cash statute is necessary for uses to fully embrace this new currency, and the statute must place the protection of individual privacy as its highest priority. Without such legislation, the Internet may never realize its full potential.
Catherine M. Downey, The High Price of a Cashless Society: Exchanging Privacy Rights for Digital Cash, 14 J. Marshall J. Computer & Info. L. 303 (1996)