Will the roar of stock markets, the crackle of currency and jangle of cash-registers &emdash; soon die away to a weightless whisper of electrons? Will the six-bit shave and a haircut cost bytes instead?

In 1996, Internet commerce - still in its infancy - contributed 1 percent of our gross domestic product, and at least one expert has predicted billions in Internet commerce by the year 2000. According to Larry Irving of the NTIA, the federal government is required to make all payments electronically except tax refunds by January 1, 1999.

So what effects will virtual cash, faceless electronic transactions and digital signatures have on government, business and society? Government Technology interviewed Irving and a panel of experts to find out.

--------------------------------------------------------------------------------

Question 1:

At least one expert has predicted that by the year 2000, $1 billion in commerce will be conducted annually over the Internet. Do you think electronic commerce will have far-reaching effects on our society? If yes, could you give a few examples?

--------------------------------------------------------------------------------

Question 2:

What opportunities does electronic commerce present to state and local government?

--------------------------------------------------------------------------------

Question 3:

A number of states have legislated standards in electronic signatures and other features of electronic commerce. Is this a good idea? Why or why not?

--------------------------------------------------------------------------------

Question 4:

How will jurisdiction-based regulatory agencies cope with "virtual corporations" in cyberspace?

--------------------------------------------------------------------------------

Question 5:

Business Week reported recently that Rep. Cox (R-Calif.) and Sen. Wyden (D-Ore.) plan to propose a moratorium on any new federal, state or local taxes on electronic commerce. Won't this bill hurt state and local sales tax revenues?

--------------------------------------------------------------------------------

Question 6:

Currently, states can only impose taxes on out-of-state companies if they have a "physical presence" in that state. How will electronic commerce affect that viewpoint?

--------------------------------------------------------------------------------

Question 7:

How can the need for strong encryption in electronic commerce reconcile with law enforcement's need to conduct legal wiretaps?

--------------------------------------------------------------------------------

Question 8:

Will ironclad identity documents or a national ID card be a necessary prerequisite for widespread electronic commerce?

--------------------------------------------------------------------------------

Question 9:

The IRS started a program to pay taxes by computer, but pulled the plug because of fraud. Is fraud more prevalent with electronic transactions?

--------------------------------------------------------------------------------

Question 10:

What is the most effective way to begin a state or local government electronic commerce initiative?

--------------------------------------------------------------------------------

Question 11:

What "best in class" electronic commerce solutions exist in the public sector?

--------------------------------------------------------------------------------

Question 12:

Other comments?

--------------------------------------------------------------------------------

Question 13:

By the year 2002, what percent of government's business

will be transacted online?

Kawika M. K. Daguio

is federal representative for operations, retail banking and risk management in the Regulatory and Trust Affairs Division of the American Bankers Association (ABA) in Washington, D.C. He addresses operations, technology, risk management and privacy issues arising out of federal regulatory or legislative proposals - included are: check operations, coin and currency, counterfeiting, cryptography, debit/ATM/credit card operations, digital cash and stored value cards, fedwire operations, government financial operations, information technology management, information security, payment system risk and telecommunications.

Prior to joining ABA, Kawika was a financial program specialist with the U.S. Department of Treasury, Financial Management Service. He has been employed in technology and financial positions in both the private and public sectors.

Mr. Daguio, holds master's degrees in business administration and public management from the University of Maryland at College Park. He earned his bachelor's degrees in social science and social ecology at the University of California at Irvine.

Wayne Hanson  |  Editor