- A group of lawmakers has proposed an electronic dollar that they hope will rival any CBDC
- The ECASH bill proposes a digital dollar that is akin to cash, meaning it is not tracked in any way
- The tokens will provide the same levels of privacy as cash, with the same drawbacks over loss or theft
A new form of digital cash for the U.S. has been proposed by a group of lawmakers, who argue that the Treasury Department, not the Federal Reserve, should be in charge of the next generation of money. The four representatives tabled the Electronic Currency And Secure Hardware (ECASH) Act yesterday, an act that would see the creation of a digital dollar on very different grounds than that being prepared by the Fed, making it much more like a digital version of cash rather than a CBDC.
The Fed Has Competition
Talk of a Federal Reserve-issued and controlled digital dollar has grown in recent years as countries like China have stepped up their CBDC game, threatening to leave the U.S. behind in this new e-money arms race. The proposals discussed would see a form of electronic currency that would impose KYC regulations on users, allowing their every transaction and purchase to be monitored.
Four representatives, Stephen Lynch (D-Mass.), Jesús Chuy Garcia (D-Ill.), Ayanna Pressley (D-Mass.) and Rashida Tlaib (D-Mich.), have seemingly taken umbrage to the strict controls and introduced the ECASH bill, whose electronic dollar will be a cross between a traditional physical dollar and a cryptocurrency – the coin will be digital but will be the sole preserve of the owner, with no influence, or tracking, by any authorities.
This will mean that transactions will not be monitored, allowing users to use and spend their money like cash but with the convenience of having it on their phone, with no additional checks over what banks currently carry out applied.
ECASH System Would Treat Coins Like Cash
An interesting aspect of the electronic dollar proposed in the ECASH bill is that, in the same way that cash in a lost or stolen wallet is not returned to you by the Federal Reserve, any lost or stolen electronic dollars would also not be able to be returned to you – if you lose it, it’s gone.
The reason for the approach taken by the ECASH bill is to ensure that Americans aren’t subjected to unwarranted surveillance by the state through a digital dollar, and that the privacy afforded to cash users is retained. Proponents of a digital dollar are worried that if regulations such as KYC are imposed on users then it won’t catch on due to the privacy concerns.
The electronic dollar proposed in the ECASH bill is also supposed to help those who cannot afford to maintain regular bank accounts, with no minimum deposit amount required for this version of the digital dollar.