Dems propose Treasury e-cash, a peer-to-peer electronic cash system

House Democrat representatives contiguous are introducing a measure that calls for the improvement of an physics mentation of the U.S. dollar that has the aforesaid ineligible presumption and privateness expectations arsenic carnal cash.

The bill, titled Electronic Currency and Secure Hardware (ECASH) Act, would nonstop the U.S. Treasury Department, not the Federal Reserve, nota bene, to found a programme to coordinate the improvement and implementation of e-cash and the exertion indispensable to enactment it, specified arsenic cryptographic hardware, each according to a report by The Register.

The projected measure is sponsored by Representative Stephen Lynch (D-MA), Chairman of the Task Force connected Financial Technology, and by Representative Jesús “Chuy” García (D-IL), who serves connected the Committee connected Financial Services. Also, Representatives Ayanna Pressley (D-OH) and Rashida Tlaib (D-MI) are co-sponsors of the bill.

E-cash to beryllium issued by the U.S. Treasury Department

Rohan Grey, adjunct prof of instrumentality astatine Willamette University, and a fierce critique of crypto provided proposal connected the drafting of the measure and told The Register that, dissimilar different integer dollar proposals, the “e-cash” would not beryllium issued by the US Federal Reserve and frankincense would not beryllium a CBDC. Nor, helium said, would it impact immoderate benignant of blockchain, distributed ledger, oregon different intermediated account.

According to reports, the ECASH Act represents a effect to caller calls by the U.S. Federal Reserve and the Biden administration to beforehand the improvement of integer assets.

“By establishing a aviator programme wrong Treasury for the improvement of an physics US Dollar, the ECASH Act volition greatly inform, complement, and beforehand ongoing efforts undertaken by the Federal Reserve and President Biden to analyse the imaginable plan and deployment options for a integer dollar,” Lynch said successful a statement.

The projected e-cash would, interestingly enough, beryllium issued by the U.S. Treasury Department, not the Federal Reserve Board, meaning it would not technically beryllium a cardinal slope integer currency (CBDC), nor would it beryllium built connected a blockchain oregon necessitate the net to beryllium used. It is designed to replicate “the privacy-respecting characteristics of carnal money,” specified arsenic coins and notes, arsenic overmuch arsenic possible.

More privateness and anonymity than authorities integer currency

The aviator programme projected by the ECASH measure volition “complement the ongoing efforts of the Federal Reserve and President Biden to research and beforehand imaginable plan and implementation options for a integer dollar,” said Lynch. The inaugural is not intended to regularisation retired a Fed-issued CBDC, but exists successful tandem with the “fedcoin”.

The projected e-cash seems to connection much privateness and anonymity than immoderate different government-sponsored integer currency task to date, and calls for an “electronic dollar” for usage by the wide nationalist that is claimed to beryllium capable to bash “immediate, final, direct, peer-to-peer, offline transactions utilizing unafraid hardware devices that bash not necessitate oregon necessitate further oregon last colony connected oregon done a communal oregon distributed ledger oregon immoderate different further support oregon validation.”

In a remark to Cointelegraph, Rohan Grey explains that the E-cash could beryllium exchanged by 2 individuals tapping their phones together. It mightiness beryllium sent implicit distances similar secured substance messages, though this would necessitate telephone service, dissimilar face-to-face. It is intended to beryllium easy utilized successful a retail setting. Grey envisions a aboriginal mobile telephone app with 3 accounts oregon options: 1 for the owner’s slope account, the 2nd for a recognition paper account, and a 3rd e-cash account.

“If you suffer your device, you suffer the money”

Without the accustomed intermediaries successful integer payments today, similar recognition paper companies, banks, oregon the government, it introduces immoderate risks, Grey added.

“You’re holding the wealth connected your device. If you suffer your device, you suffer the wealth — that’s the risk. Just similar you suffer your carnal wallet connected the train, you suffer each the wealth wrong the wallet.”

Why, then, would the projected e-cash beryllium issued by the Treasury Department and not the Federal Reserve?

“If you were to accidental you wanted to make thing integer that works similar carnal currency: It’s a token, it’s a bearer instrument, determination are nary accounts, nary intermediaries oregon it’s going to beryllium retail-focused, who should contented that?” Grey asked.

Treasury is the evident campaigner successful Grey’s mind. The Treasury already houses the United State Mint and the Bureau of Engraving and Printing. The Treasury is already participating successful activities that are akin to physics cash, similar providing prepaid debit cards.

“The Federal Reserve consists mostly of macro-economically trained academics and bankers. They’re not civilian liberty experts oregon overseas affairs specialists. The Treasury, by contrast, encompasses agencies similar the Office of Foreign Assets Control, which enforces overseas economical sanctions. Treasury has a wider scope and a broader skillset,” Grey said.