Non-Crypto Digital Dollar ‘E-Cash’ Is Proposed In A Bill Introduced In The US House of Representatives

On Monday, the United States House of Representatives presented the Electronic Currency and Secure Hardware Act (ECASH Act) Non-Crypto Digital Dollar ‘E-Cash‘. The bill directs the US Secretary of the Treasury to design and test an electronic version of the US dollar that is simple to use for those who are economically disadvantaged or technologically handicapped.

According to Representative Stephen Lynch, chair of the House Financial Services Committee’s Fintech Task Force, the bill will also “maximize” consumer protection and data privacy.

The ‘no crypto, no blockchain’ twist

As highlighted above, e-cash—as it is called—would be issued by the U.S. Treasury Department and not the Federal Reserve Board. So, it would technically not be a central bank digital currency (CBDC).

Rather than building a central bank digital currency (CBDC) sustaining on a blockchain, the electronic dollar would be a digital token—a bearer instrument just like paper currency. This means that if it’s lost, it’s gone.  As such, it is designed to “replicate the privacy-respecting features of physical cash,” like coins and notes to the greatest extent possible.

The e-cash would be legal tender, and would not need internet access to transact. This form of e-cash would, however, support P2P transactions.

Per Lynch’s proposal, users wouldn’t be subject to any severe know-your-customer [KYC] rules as anyone trying to use cash. They can acquire the e-cash dollars via a bank account, P2P transaction, or a store, and could then use it for anything.

Doing so has the potential to serve people who aren’t in a position to hold bank accounts owing to the minimum balance requirements. The same would aid the adoption rate of e-cash.

The bill envisions the launch of a two-phase e-cash pilot program within 90 days of enactment. In fact, the deployment of e-cash to the American public is expected no later than 48 months after enactment. 

What about the actual CBDC then?

The initiative isn’t meant to necessarily put a stop to a Fed-issued CBDC. Per Lynch, the pilot program launched by the ECASH Act will,

“Complement, and advance ongoing efforts undertaken by the Federal Reserve and President Biden to examine the potential design and deployment options for a digital dollar.”

On its part, the CBDC project has been making significant progress. In one of the two recently conducted pilot tests, the digital dollar achieved a record speed of 1.7 million transactions per second (TPS)—way faster than most crypto networks.

Per CNBC, the CBDC project is still in its early stages and has been codenamed ‘Project Hamilton’. It is being developed in a way where it would be able to withstand transaction downtimes caused by server breakdowns and other issues. As such, the primary goal of ‘Project Hamilton’ is to tackle technological and regulatory problems that are plaguing the global CBDC sector.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Annie

CoinCu News