While one arm of the U.S. government discouraged private-sector cryptography development, another was promoting it.
The National Institute of Standards and Technology is undertaking a public initiative for what it calls the Advanced Encryption Standard (AES) to serve as the cipher of choice for encrypting all government records. It will replace the currently used Data Encryption Standard, which was created in the early '70s and today can be cracked in a matter of hours.
In August the institute selected five algorithms as finalists for AES, and the global crypto community will fastidiously review each through May 2000 to determine the strongest. Two finalists were developed in Europe, and three are from U.S. firms.
Once chosen, the open-source, nonproprietary standard will instantaneously become the most widely deployed encryption algorithm: the federal imprimatur will provide banks and corporations worldwide with the assurance that they are using a suitably strong cipher to protect data (and protect the companies from lawsuits charging that they are using an inferior product).
For the developers, it is not fortune but fame that is at stake: so that it can be freely used, AES will be devoid of intellectual property rights claims.