Janis Mara reports in this Wired article on a hush hush deal between the European Central Bank and Hitachi Corp, to embed wireless transponders (RFIDs) the size of a grain of sand into the fibers of Euro bank notes. "There is a worry in our field as to how these things will be used, given the lack of coherent privacy regulations," said Dan Moniz, staff technologist for San Francisco's Electronic Frontier Foundation, a digital watchdog organization. "It would be easy to establish a system where intelligence agencies track how money is spent. What if I'm an ethnic Turk in Germany, where there is a long-standing conflict between the Turkish and German populations, and I buy books on establishing a Turkish state?" Moniz asked. "The German police could start tracking me. If I go to France or another country that is part of the 12 member nations using the euro, the German police could notify the French police, and they could keep track of me," Moniz said. The 12 nations that use the euro are Italy, Luxembourg, the Netherlands, Spain, Portugal, Ireland, Greece, Germany, France, Finland, Belgium and Austria. Until now, Moniz pointed out, the only truly anonymous form of payment has been cash. "If you write a check, the instrument itself bears your name and other data. Credit cards have an obvious audit trail; traveler's checks have one as well. But always, until now, cash payments have been mostly untraceable." Full artcile here