banking and credit card transactions, the current cash transactions rules need to be applied to electronic money in order to reduce the attractiveness of these products to criminals relative to cash.
Many businesses are working on ways to transfer money and purchase items electronically. Cybercash, a Reston, Virginia enterprise, is developing software that would allow rapid payment methods while insuring that the transactions could not be used to launder money. Because, to receive cash, all transactions eventually must pass through a bank--where anti-laundering techniques are already in place--"cyber-laundering" is not something that is going to happen, at least not in our system," said Larry Gilbert, general counsel of Cybercash.
In 1996, the BIS issued two reports on electronic money. These reports arose from work done by G10 central banks. The first report concerns itself exclusively with security issues, while the second considers a wider range of matters of public policy interest.
The Bank of England publication analyzes some of the concerns of the BIS regarding the development of e-money. The potential use of electronic money for faster, more efficient money-laundering must be balanced against the significant social and economic benefits that electronic money will bring in terms of increased transactional efficiency. Policy makers face a difficult task balancing the interests of social and consumer protection against the need to avoid restricting innovation. Banking regulators are just beginning to probe a potentially rich vein for money launderers.
Many reputable companies are developing ways to bank and buy goods over the Internet, so cyber-laundering cannot be far behind. But money-laundering has become a high profile crime since the explosion of drug trafficking starting in the United States. This explosion cause the recognition of the importance of regulations and laws to prevent money-laundering and resulted in the anti- money-laundering laws which were enacted just over ten years ago.
This concern is as international as the use of money. Hans Tietmeyer, chairman of the G10 central bank governors, was quoted as saying that he would be "vigilant" about the effects of electronic cash. His concern is that because some of the new payment Systems do not leave an audit trail and allow the transfer of money between cards and across borders without going through banks or clearinghouses.
Although it is difficult to put a dollar figure on it, the phenomenon of money-laundering may now be almost as common as insider trading or tax