Some U.S. legislators are arguing for a digital greenback in the form of an “E-cash” blockchain asset that would represent a digital dollar and free up new ways of managing money in the U.S.
Unlike some other past project ideas, this would be constructed under the aegis of the U.S. Treasury, and not the Federal Reserve.
“The electronic dollar, as defined in the bill, would be a bearer instrument that people could hold on their phone or a card,” reports Nikhilesh De at Coindesk. “The system would be token-based, not account-based, meaning if someone were to lose their phone or card, they would lose the funds. In other words, it would be like losing a wallet with dollar bills in it.”
Signatories include U.S. Representatives Stephen Lynch (D-Mass.), Jesús Chuy Garcia (D-Ill.), Ayanna Pressley (D-Mass.) and Rashida Tlaib (D-Mich.)
Many are arguing that the E-cash digital dollar would help the un-banked, who have a fraught relationship with traditional banking instruments like checking accounts.
As CBDCs go, the E-cash asset would be more like Bitcoin than some national efforts. In fact, at least one analyst suggests you shouldn’t call the E-cash token a CBDC at all.
“Under this act, the U.S. digital dollar would actually not be a CBDC, since it is not controlled by the Fed,” writes Brendon Rearick at InvestorPlace. “This turns the government-issued stablecoin precedent on its head; most every other nation with a digital currency program does so through CBDCs.”
E-cash, on the other hand, would be fully decentralized and fully anonymous.
It would be, in a sense, like cash.
However, the project, as proposed, would have some specific oversight, enumerated in this part of a document spelling out proposed policy:
“Establishing an independent five-member Monetary Privacy Board, and directing the Board to review, evaluate, and periodically report on the extent to which the decisions and actions of the Treasury Secretary and other actors involved in the development of E-Cash are 3 consistent with their statutory responsibilities under the ECASH Act, and more broadly, a general commitment to preserving the privacy interests of individuals and actors that use e-cash and other forms of digital dollar technologies issued or administered by the United States government.”
We’ll see if this form of electronic cash takes off.
