6.0 Summary

Although alternative payment mechanisms for use over the NII exist, electronic tokens offer several particularly attractive features. Electronic tokens can duplicate many of the conveniences and benefits of real cash when used in financial transactions over the NII. Furthermore, they can be used even over unreliable networks or networks with only intermittent connectivity. Also, electronic tokens require minimal communication and processing resources.

Certain choices must be made regarding how electronic tokens are to be implemented in the NII. A broad implementation could extend electronic tokens beyond serving as a simple (albeit secure and protected) analogue to paper cash to serving as analogues to such payment mechanisms as checks, credit charges, and electronic benefits transfers. Or, electronic tokens could be implemented with all the features of paper cash, including anonymity, and allow an unlimited number of "inaudible" off-line person-to-person exchanges. Such an implementation could be extremely difficult to manage and control. Alternatively, electronic tokens could be restricted to certain limits and features. For example, the number of off-line person-to-person exchanges allowed could be limited, or there could be a limited time period during which the token is valid before it must be redeemed by the issuer or a bank.

Numerous other implementation issues will need to be addressed, including liability, identifying valid issuers of electronic tokens, the need for a multi-currency capability, and the need to establish international rules and regulations regarding the use of electronic tokens before a truly secure, convenient, safe and private electronic token system can be developed and accepted.

The decisions and collective wisdom not just of financial and technology experts, but of public policymakers and ultimately of ordinary consumers will be needed to realize the potential benefits of this emerging technology. The Cross-Industry Working Team will promote the exploration and diffusion of technical solutions to meet new opportunities for electronic commerce afforded by the NII.