Tietmeyer-Only banks should issue electronic money

["Joseph M. Reagle Jr." <reagle@rpcp.mit.edu>]

I'm sure they'd like to have it "applied to Internet network money."....

			 
>	 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. 
>	 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. 
_______________________
Regards,          He who foresees calamities suffers them twice over. -?
Joseph  Reagle    http://rpcp.mit.edu/~reagle/home.html
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