Traceable e-cash

The widespread success and acceptability of electronic cash systems ultimately will involve striking a balance between anonymity and traceability. Traceable e-cash would make it harder to commit many crimes but would also threaten users' privacy. Completely untraceable digital cash would pose new difficulties for law enforcement agencies. Although physical cash has certain properties of an anonymous medium, its anonymous use is significantly constrained by the following considerations: bulk-large amounts of money take up a certain amount of space, but this sort of bulk sometimes helps authorities track money; transactional delays-the process of transferring, verifying, and counting bills takes at least a few seconds and for larger quantities, the times required are even less trivial; palpability-physical cash cannot be transferred over a computer network, and transferring it securely to a remote payee takes time and resources that may render the process somewhat visible; traceability-if law enforcement authorities know the serial numbers of bills being tracked, financial institutions may be able to help identify the next person who deposits them.