  A quantum key distribution scheme based on the use of displaced squeezed
vacuum states is presented. The states are squeezed in one of two field
quadrature components, and the value of the squeezed component is used to
encode a character from an alphabet. The uncertainty relation between
quadrature components prevents an eavesdropper from determining both with
enough precision to determine the character being sent. Losses degrade the
performance of this scheme, but it is possible to use phase-sensitive
amplifiers to boost the signal and partially compensate for their effect.
