Last week's Treasury Department conference on electronic money and banking had Comptroller of the Currency Eugene A. Ludwig and Treasury Secretary Robert E. Rubin beaming.

The two-day gathering appeared to be a money-maker - 600 participants each shelled out $500 - but beyond that, it validated the Treasury's initiative to keep the government abreast of electronic money innovations.

Mr. Rubin focused the Clinton administration's efforts on what he called a "nonideological" effort to "get the right balances and tradeoffs" between an unfettered market and government intervention.

The Treasury chief has made Mr. Ludwig his point man for electronic money explorations. When Mr. Rubin concluded his welcoming speech Thursday, before taking questions from the audience, he jokingly offered this stock response: "It's good for the economy, and the details I'll leave to Gene Ludwig."

Federal Trade Commission Chairman Robert Pitofsky, who discussed how consumer protection and antitrust laws might apply to electronic money, said he liked Mr. Rubin's idea. His proactive answer: "It's probably good for consumers, and the details I'll leave to Gene Ludwig."

Mr. Ludwig shifted attention, and credit, back to his boss: "I knew this was an important area - banks were beginning to get into it, making investments - but at first I didn't recognize the importance of the technology to the economy. Secretary Rubin clearly did."


It seemed everyone was pleased to hear regulators reiterate their intention to maintain a "hands-off" policy in the developing electronic money markets.

But a few interesting twists emerged on that theme. Some at the conference said government restraint isn't enough to ensure that banks can compete with nonbanks.

"They say they have a hands-off policy, but they're actually standing on our feet," said one observer. "They really need to recognize the difference between not getting in our way and getting things out of our way."

Fred M. Winkler, executive vice president and head of First Union Corp.'s card products division, said he didn't mind new regulations for banks issuing electronic money, as long as nonbanks are subject to the same rules.

"Either treat us all the same, or leave us alone," he said.


Samuel H. Banks, deputy commissioner of the U.S. Customs Service, said his agency has valuable experience to contribute regarding law enforcement concerns arising from electronic money.

The challenge will be to transfer that expertise from airports and other entry points to the borderless Internet world. Mr. Banks expressed concern about a lack of electronic audit trails, which would be essential to successful money-laundering prosecutions.

William McDonough, president of the Federal Reserve Bank of New York, then asked Mr. Banks whether he would like to have an audit trail - a record of his transactions - stored on his own smart card.

"Yes," Mr. Banks said. "That's the official position. That's not necessarily a personal position."

Mr. Banks added that the advent of electronic money might spell unemployment for some Customs Service workers: currency-sniffing dogs. "I guess we'll have to put them back in the kennels," he said.

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