Fw: Geo-politics and Ant Warfare [rant]
Rohit Khare (firstname.lastname@example.org)
Mon, 7 Oct 1996 08:59:00 -0400
> Sender: email@example.com
> Date: Sun, 6 Oct 1996 23:45:29 +0200
> From: Ian Grigg <firstname.lastname@example.org>
> Subject: Geo-politics and Ant Warfare [rant]
> Geo-politics and Ant Warfare
> It is interesting to see the debate that is going on within the central
> banking community. Compare these two statements. Hans Tietmeyer urges
> central bank control:
> FRANKFURT, Oct 3 (Reuter) - Bundesbank President Hans Tietmeyer
> said on Thursday a new government policy to give only banks the
> right to issue pre-paid cards, or ``electronic purses'', should
> also be applied to Internet network money.
> whilst Alan Greenspan urges free market development:
> In conclusion, electronic money is likely to spread only gradually
> and play a much smaller role in our economy than private currency
> did historically. Nonetheless, the earlier [free banking] period
> affords certain insights on the way markets behaved when government
> rules were much less pervasive. These insights, I submit, should be
> considered very carefully as we endeavor to understand and engage
> the new private currency markets of the twenty-first century.
> The BIS and similar organisations enjoy a secretive reputation second
> to the spooks. However, this time, the debate would appear to be being
> carried out in public as well. I would guess that this results because
> the digital cash scene is not part of the banking world. Rather, it is
> an invention of cryptographers, programmers and other technologists, and
> any debate on the subject must involve them, or drift into fantasy.
> Many of us have thought long and hard about how the future will look if
> digital cash takes off under a free banking scenario. The ability of
> digital cash to be issued from anywhere, by anyone. A world where
> reputation is everything, and the state has a poor PR team. We've all
> had fun redesigning the world. But we have all assumed that our designs
> will be universally accepted.
> What will happen if one side of the Atlantic adopts a free market
> whilst the other side decides to regulate? A standoff between
> Wildcats and the Tietmeyer Blitzkriegers?
> If such were to develop, it is probable that the battle would develop
> existing Internet lines. European banks would breath a collective sigh
> relief and get on with the business of converting their existing customer
> base over to electronic banking, using the Internet as a new form of
> telephone. They would be safe behind the walls of Fortress Europe, for a
> while at least, ignoring the small but annoying inroads of the Internet-
> based competition.
> In the meantime, the battle for digital money supremacy would be being
> fought over in the free market North America. And what would emerge is
> likely to be a powerful, integrated financial system that lives in the
> Internet and is cohesive with it. In the short term, a great shift in
> composition would occur as many non-banks enter the banking business. In
> the medium term, after the victor(s) emerge, the fight for growth would
> push the battle over to uncommitted peoples such as Asia and the other
> Americas. And in the long term, it's time to take on that last bastion
> of regulated banking.
> Earlier today, I was guessing that Mr Tietmeyer was buying his banks
> 3 years of peace (and nice profits), and there wouldn't be too much of an
> opposition to that notion. But after ploughing my way through today's
> of announcements, I now downgrade the "long term" to 6 months of Indian
> summer. That is, before the ink dries on his new law of banking social
> security, it will be about as much use as a printout of an IP packet.
> In contrast, Mr Greenspan is signalling the start of an era of
> He may stain a few reputations and friendships in the process, and ruin
> chance of a cushy retirement number at anywhere but CitiBank, but he's
> offering the prize of the rest of the world at the end of the battle.
> the Internet Financial System settles down into a nice, stable,
> industry (run by Americans, of course), then it's time to absorb the
> That is, if he is allowed to get his way. Regardless of Mr Tietmeyer's
> preferences for "peace in our time", there is much activity in the
> cash munitions factories. Programmers and cryptographers are an
> undisciplined lot, as well as being more international than the TLAs give
> them credit for. It is unlikely that they will just hand over their
> invention, even if asked nicely.
> So what happens next? Well, banking on the Continent is being wooed with
> promises of protection, whilst the soldier ants of the Internet war
> are gathering on the border. Indigenous ant production may save them,
> there again, it may not.
> To live in interesting times, indeed.
> iang 06 oct 96
> http://www.bog.frb.fed.us/BOARDDOCS/SPEECHES/S960919.htm is Alan
> hinting that maybe they shouldn't have set up a central bank in the first
> http://www.ffhsj.com/bancmail/tpvtest.htm for an excellent display
> on the diplomacy of regulation.
> The rest of the above Reuters release:
> Tietmeyer said in the text of a speech to The Economic Club
> of New York that G-10 central bank governors were addressing the
> new payment forms because they may cause difficulties for
> central banks to ensure the integrity of payments.
> Tietmeyer noted European Union central bankers have agreed
> that only banks should issue the pre-paid cards. The policy is
> expected to be widened to include the rights to create and
> maintain Internet-based electronic cash systems.
> ``In our opinion, the same should definitely also apply to
> network money,'' he said.
> Tietmeyer said electronic forms of money tend to crowd out
> currency and deposit money, which may increase the potential for
> credit institutions to create money.
> ``Electronic money may impair the supervisory functions of
> the central bank, or, in other words, its function of ensuring
> the integrity of payments,'' Tietmeyer said in a text of the
> speech released in Frankfurt under embargo.
> ``That would increase the risk of crises in one country
> spreading out to engulf payment systems worldwide,'' he said.
> Electronic purses are plastic cards with a built-in
> micro-chip which stores the electronic cash value of an account
> and can be reloaded at special machines.
> The proposal to restrict such projects to banks is part of a
> new German banking law which is still under preparation but
> expected to be enforced in 1997.
> Tietmeyer said it was difficult to create definitive
> regulations for electronic money at ``this early stage''.
> ``The evolution of electronic money is only in its infancy.
> But it is a characteristic feature of today's world that
> tomorrow's world will be upon us in no time,'' he said.
> Electronic purses, also known as smart cards, are not yet
> available in cash-dominated Germany but tests are being run on
> several projects.
> Internet banking is slowly gaining credence in Germany after
> some of the top banks, including Dresdner Bank AG, launched
> securities trading accounts via the Internet.
> --- end forwarded text
> Robert Hettinga (email@example.com)
> e$, 44 Farquhar Street, Boston, MA 02131 USA
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