SUMMARY
     
     In a strange quirk of fate, the Internet may be breathing new life into an ancient currency -- gold.
     
     Several Caribbean-based Web companies have begun storing gold in places like Dubai, Zurich and London and allowing Internet users to own pieces of the metal and use it as an online currency.
     
     So instead of relying on credit cards -- the dominant online payment system -- people can opt for bullion-based cybermoney, which purveyors tout as a quick, cheap and private alternative.
     
     "We've got people using it all over the world," said James Turk, founder of GoldMoney, a Bahamas-based online payment business.
     
     The advent of globe-spanning e-commerce has allowed transactions to skip easily across national boundaries, making for easy shopping for anyone with a modem. But most transactions in cyberspace still involve national currencies, fraught with risk of fluctuating exchange rates and the cost of bank commissions.
     
     Their currency offers an international purchasing solution that economists have only begun to contemplate: a stable, cashless currency that offers instant purchasing power across borders. Digital currency holders can use the Internet's anonymity to buy things online, send money to other users or simply exchange national currencies into cyber-gold.
     
     But the ease of hiding ill-gotten gains in virtual gold scares financial crime fighters and regulators, who struggle to track shady offshore banks and money launderers.
     
     "There is tremendous potential in using these products for money laundering," said U.S. Secret Service Agent Eddy Lugo, who works for the Treasury Department in Washington D.C.
     
     So far, no digital currency business has established bank-like standards for reporting suspicious activity, Lugo said.
     
     To set up an account at a digital currency Web site, customers need only register with an e-mail address and password.
     
     Launched in 1996 and registered on the Caribbean island of Nevis, E-gold claims more than 200,000 accounts and more than $14 million of currency in circulation.
     
     On Nevis, Finance Secretary Laurie Lawrence said authorities who registered E-gold as an offshore company still were trying "to get a handle" on how digital currency operates and whether to regulate it. The government of St. Kitts and Nevis is drafting its first money-laundering regulations.
     
     Both E-gold and GoldMoney said they are developing safeguards, including certificates that aim to identify clients as legitimate depositors with a clean financial record.
     
     And because the currencies tracked by computer, all transactions are recorded and traceable to an Internet service provider.
     
     "You can't build a solid business by catering to criminals," said Jackson.
     
     The U.S. Secret Service, which tracks financial crimes, said it could not confirm money laundering was occurring with digital currencies, but added that the currencies were "wide open" to this type of crime.
     
     Links to Cyber Gold Currency Providers
     
     http://www.icegold.com
     
     http://www.e-gold.com
     
     http://www.goldmoney.com
     
     
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