Slide 2 of 9
Financial Activities on the Internet
In theory there is no limit on the scope of financial activity on the Internet. Only a tiny minority of financial transactions involve “real” money, i.e. notes and coins - most financial services transactions are effected by moving information from one place to another, and adjusting accounting records as a consequence. In the long term, complex financial instruments will be dematerialised and traded via the Internet (see e.g. the Bolero presentation).
The immediate market, however, is the consumer and small business market, because it is there that the economies of using the Internet communications infrastructure produce the greatest benefits. This market is the most heavily regulated - complex commercial transactions involving financial instruments will, initially at least, be regulated primarily through contracts which bind all those taking part in trading systems.