WHEN CONGRESS SENT THE Y2K liability legislation to President Clinton this July, lawmakers were eager to show they were technology-savvy. They E-mailed an electronic version of the bill to the White House. But the President couldn't sign it, because electronic signatures aren't legally binding. So Congress sent the bill over on paper, and Clinton signed the old-fashioned way: in ink.

But that may not happen to the next President. Congress is drafting a bill that would legalize digital signatures. The government would set guidelines to validate and secure online transactions, which should be a boon for E-commerce. Brokers, such as Charles Schwab, for instance, say cyber-signatures will make online trading more accessible to the public. If the bill becomes law, your "signature," a series of encrypted keystrokes known only to you, will be just as binding as the "pen-and-ink" version. With no opposition, and the backing of such heavyweights as IBM and General Electric, the bill could pass by yearend. In all three versions of the legislation now pending, Congress would preempt state regulations on validating E-signatures, until the states have their own policies in place.

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