"It is clear that money launderers will be using ways to place and layer funds in a manner that loses audit trails," says one of the conference speakers, Dr James Backhouse, of the Computer Security Research Centre at the London School of Economics.
Dr Backhouse dismisses claims from some accountancy firms that the software they are developing will be able to follow money round the world, and root out who is sending "dirty" money where. He believes banks and other financial institutions will co-operate with criminals to hide illegally obtained money.
"Auditors have to make a living, and they are pumping a balloon when they talk in these terms," argues Dr Backhouse. "Look at wire transfers today. Where banks, especially in North America, wire money from one bank to another they use a closed system, yet police investigators are unable to track 90 per cent of dirty money sent through wire transfers."
Problems will worsen when electronic transfers are made by thousands of businesses and individuals, without necessarily using intermediaries. Many Internet service providers (ISPs) have begun offering transaction facilities in competition to banks. "There is no reason why issuers of electronic money need to be banks," continues Dr Backhouse. "Organised criminal groups are going to become ISPs, in the same way that they run some banks, in Russia and elsewhere. The whole system of regulation we have at the moment is going to be overtaken."
A colleague of Dr Backhouse at the LSE, Professor Ian Angell, another speaker at the conference, even argues that governments should ask whether they must give up trying to police commercial transactions, and recognise that people will do business in their own way, and avoid state interference.
"Territory is now meaningless," says Dr Backhouse. "I don't see how regulation can work. The whole underpinning of regulation is going to rot away, and rapidly. Electronic commerce is the driver, and electronic money is the means. Once you have a critical mass of electronic commerce using legitimate money it will be easy for dirty money, used electronically, to nestle among the leaves.
"It is early days, but we have seen how quickly the Internet has taken off, and it is only a matter of time before the teething problems of electronic money are overcome, and the way will be open for moving value away from one country to another."
And when it does, governments may find it impossible to collect any taxation, says another conference speaker, Rowan Bosworth-Davies, senior consultant with Titmuss Sainer Dechert, and author of The Impact of International Money Laundering Legislation. Mr Bosworth-Davies believes that by use of barter and promissory notes, and by using commercial "flags of convenience" - offshore financial centres that are willing to forgo any taxation revenue - it will be possible to avoid all income and corporation tax.
"We will stop talking about money, eventually," he predicts. "Do our policy makers have a handle on this? Answer - no."
The problem of money-laundering is much less important than the one of how governments will continue to function without income, suggests Mr Bosworth-Davies. "I am no longer interested in crime. The big issue is how democracies will fund themselves. How will they raise the money for welfare needs? People are now able to emigrate electronically, and re- create themselves in an economic sort of cyberspace. This is where problems will lie, because societies will no longer be able to finance the concept of government."
One option already being considered by both the European Commission and the US government is to tax all transference of electronic information, the so-called "bit tax" proposal. But this is open to avoidance, through the use of host computer systems based in zero-tax or low-tax economies operating as new offshore financial centres.
Taken to its logical conclusion, electronic money could destroy the concept of society as we know it, Mr Bosworth-Davies believes. "When governments can't tax you anyway, it knocks out their reasons for existence"n The conference "Cyberlaundering and fraud - electronic money washes whiter?", will be held in Lisbon on 3 and 4 June, organised by the International Conference Group (0181-743 8787).