The cyber-economy which is developing via the Internet represents a serious challenge to the ability of nation-states to exercise sovereignty over their economies. Nation-states stand to lose the ability to control their commercial borders, monetary controls, and the ability to utilize fiscal policies. If national sovereignty is to be maintained, then governments must develop effective regulations focusing upon the cyber-economy. However, recent attempts at regulating the Internet are proving to be ineffective and it is unlikely that regulating the Cybereconomy will prove any easier. Thus, national sovereignty over certain important economic matters may be coming to an end.