On the heels of President Biden's recent executive order about cryptocurrency, officials are looking to create an electronic version of the U.S. dollar that people would use much like they use the money they have in their pockets.
U.S. Representative Stephen F. Lynch (D-MA), Chairman of the Task Force on Financial Technology, is the congressional official behind the idea. On Monday, he introduced H.R. 7231, the Electronic Currency and Secure Hardware (ECASH) Act on Capitol Hill. Lynch thinks his idea would give consumers the kind of protection and data privacy they want while providing a smoother in-road that would allow the country to develop and regulate digital assets.
Lynch’s bill would create a pilot program run by the Treasury that could grow organically after an introductory phase, but limits would be placed on how much digital cash could change hands. Lynch framed the pilot program as a place for “smaller anonymous cash-like transactions.”
“My neighborhood in Chicago is home to one of the strongest immigrant business districts in the country, and it couldn’t run without cash, “ said Congressman Jesús “Chuy” García (D-IL). “Cash remains our strongest tool to promote financial inclusion while preserving privacy and security, and new digital tools should emulate it– not replace it.”
How E-cash would work
The concept of E-cash is actually pretty simple; all people have to do is reframe how they think of cash and embrace a digital version of it. It would still be considered legal tender that is created and issued into circulation by the Treasury, and it would be payable to the bearer just like a paper check is.
How transactions would be made: E-cash would be distributed via hardware devices, like a smartphone.
Accessibility: Accessibility is an issue the bill’s sponsors have already considered. In their outline, they said that usability for individuals with disabilities, low-income individuals, and communities with limited access to internet or telecommunications networks would all be taken care of.
Privacy: With all the data privacy issues that run amok, privacy could be a tall order. However, Lynch’s outline of the bill says that E-cash must “be distributed through secure hardware devices that are secured locally via cryptographic encryption or other similar technologies and cannot contain personal identifiable information or be subject to surveillance, transactional data collection, or censorship-enabling features."
Consumer Protection: The legislators said they would stop merchants from charging additional fees for using E-cash. They also said any disclosures that the government or any third-party authorized to distribute regarding usage, fees, interoperability, security, privacy, data collection, etc. has to be easy to understand and free of elaborate legalese.