Regulations re Potential Xanadu microTransaction Currencies

[Jeff Rush <jrush@xxxxxxxxxx>]

This is an excerpt of an email I received regarding the e-gold
exchange system.  It is interesting that all of the relevant
U.S. regulatory agencies have declined to regular -private
currency-.  Surprisingly so.  I mean, not even sales tax on
reading a xanadu document? ;-)

-Jeff

> Numerous companies and individuals located in the United States offer
> exchange between e-gold and national currencies. Their experience has been
> that State and Federal agencies have declined to regulate e-gold exchange
> activities under the guidelines promulgated for money transmitters, on the
> basis that existing legislation and regulations incorporate definitions of
> money that do not encompass privately issued currency, i.e. non-interest
> bearing liabilities designed to circulate as a medium of exchange but not
> denominated in existing government monetary units of account. On the other
> hand, individual States have declined to assess sales tax on exchange
> activities, since e-gold is used as a medium of exchange and is therefore
> not regarded as merchandise. In addition, the Securities and Exchange
> Commission has declined to regulate e-gold on the basis that it is not a
> security but is rather the equivalent of a storage receipt. The CFTC has
> also not interpreted e-gold as falling within its regulatory jurisdiction,
> because it is not a financial instrument.