The Argument in a Nutshell

Electronic money is private money, and is less "tied" to territory than money in the past, which I will call "national money." It is replacing national money.
National money is so closely tied to the evolution of the nation state that the decline of one means the decline of the other.
Electronic money undermines national money because it can move quickly and easily to and from offshore havens that are outside national jurisdiction.
This sets in motion a competitive deregulation dynamic that weakens the nation state. The dynamic has occurred at the level of wholesale finance, and is starting to occur at the levels of retail finance and electronic commerce.
To the extent that regulation of electronic money is desirable, it will only work at the supranational or international levels. The nation state is no longer very effective at dealing with electronic money.
Though I am not taking a hard-line technologically determinist view, I do believe that communication and transportation technology contributes to defining the size and shape of effective political entities. The computer and telecommunications revolution is expanding the size of effective political entities to a more global level, in place of the national entities that were defined by railways, telegraphs, newspapers, radio, etc.