A consensus seems to be building outside Bermuda that the island is ideally positioned to reap the benefits of e-commerce in the 21st century.

And one of the best-known economists in the world has endorsed the suggestion that Bermuda might, in the future, create its own electronic currency.

Time Magazine said it first: "The future banking centres of the world won't be Wall Street and the City of London, but Bermuda and Singapore,'' the weekly newsmagazine said in a piece on electronic banking and the changes it is bringing to the global economy.

A week later, MSNBC, an all-news channel, ran an article by Barton Crockett, syndicated around the world, entitled: "What will money look like in the new millennium?'' In the piece, Mr. Crockett quoted respected economist, Milton Friedman, now a senior fellow at Stanford University's Hoover Institution. Mr.

Friedman foresaw a "big, rippling affect on governments and economies'' as global economies rearrange themselves in anticipation of the worldwide spread of online currencies. Largely beyond government control, the new currencies could be "the agent of massive change in society and the global economy,'' Mr. Crockett wrote.

"For instance, a tax haven country, such as Bermuda, could mint its own untraceable electronic cash, and use it in a bid to become a new financial and commercial centre. In a globally connected world, where everyone is trading stocks and buying goods electronically, transactions would migrate to the region with the lowest tax rates.'' Bermuda does not believe that it is a tax haven, but the message is nevertheless encouraging.

As "a libertarian, I believe in much smaller government,'' Mr. Friedman said.

"People who believe in larger government will regard the development of e-currencies as a negative thing.'' Bermuda's banks can get in on this new wave of electronic money, Time suggested. Consultants McKinsey & Co. found that converting consumers to electronic transactions could result in very significant cost savings for banks. As much as 55 percent of a standard retail bank's costs come from check processing and other payments. Converting to electronic alternatives could cut those expenses by up to 90 percent, Time estimates.

In Bermuda, the cost of processing cheques, while not as high in percentage terms, remains significant. Moving customers to telephone or internet banking will help, a local banker said, but the fixed cost of processing cheques would remain even if the number of cheques shrank.

Local banks have been exploring ways of reducing cheque processing costs for some years. The problem they face is that processing machinery is designed for larger communities than Bermuda's relatively small customer base. E-currencies are very much in the mind of those who survey trends. A simple internet search for the non-existent word "e-currency'' refers the viewer to literally thousands of articles on the subject.

The Government of Bermuda is keen to take the lead in e-commerce, and Bermuda College President George Cook said at yesterday's Convocation ceremonies that e-commerce is the one great change from the past which College students must come to grips with.

BUSINESS BUC