- Reps. Stephen Lynch (D-Mass. ), Jes Chuy Garcia (D-Ill.), Ayanna Pressley (D-Mass. ), and Rashida Tlaib (D-Mich.) introduced the “Electronic Currency And Secure Hardware Act” (ECASH Act).
- The Act was introduced to direct the Treasury Secretary to develop and issue an electronic version of the US dollar while maintaining privacy and anonymity in transactions.
According to a group of US lawmakers, the Treasury Department may be the best government entity to create a digital dollar. A new bill introduced on Monday would make this possible.
Reps. Stephen Lynch (D-Mass. ), Jes Chuy Garcia (D-Ill.), Ayanna Pressley (D-Mass. ), and Rashida Tlaib (D-Mich.) introduced the “Electronic Currency And Secure Hardware Act” (ECASH Act). The Act was introduced to direct the Treasury Secretary to develop and issue an electronic version of the US dollar while maintaining privacy and anonymity in transactions.
The electronic dollar, as defined in the bill, would be a bearer instrument that people could carry around with them on their phones or as a card. The system would be token-based rather than account-based. This means that if someone loses their phone or card, they would lose the funds. In other words, it would be equivalent to losing a wallet containing dollar bills.
This ground-breaking legislation would increase financial inclusion, improve consumer protection and data privacy, and advance US efforts to develop and regulate digital assets.
Rep. Lynch said that “As digital payment and currency technologies continue to rapidly expand and with Russia, China, and over 90 countries worldwide already researching and launching some form of Central Bank Digital Currency, it is absolutely critical for the U.S. to remain a world leader in the development and regulation of digital currency and other digital assets”.
He further added that “By establishing a pilot program within Treasury for the development of an electronic U.S. Dollar, the ECASH Act will greatly complement and advance ongoing efforts undertaken by the Federal Reserve and President Biden to examine potential design and deployment options for a digital dollar. Importantly, this pilot program will also preserve a role in our financial system for smaller anonymous cash-like transactions which are currently transacted in physical dollars and which have seen a rapid decline in use.”
Congressman Jesús “Chuy” García said that “My neighborhood in Chicago is home to one of the strongest immigrant business districts in the country, and it couldn’t run without cash. Cash remains our strongest tool to promote financial inclusion while preserving privacy and security, and new digital tools should emulate it– not replace it. Our government can provide digital assets that are both secure and accessible, and this bill is an important step in that direction.”
Congresswoman Pressley said that “Our current financial system has too often served as a barrier for Black, brown, and low-income communities to build and sustain wealth. Ensuring economic justice means advancing innovative solutions that will promote financial inclusion and trustworthiness while protecting consumer safety and privacy. I am proud to co-sponsor the ECASH Act to ensure we have strong consumer protections and improve financial access and equity.”
Rohan Grey, Assistant Professor of Law at Willamette University and Research Director of the Digital Fiat Currency Research Institute said that “The E-CASH Act is the world’s first legislative proposal to create a digital dollar using secured hardware technology that replicates the privacy-respecting, peer-to-peer, and offline-capable features of physical currency,” said Grey. “Until now, the conversation over CBDCs and cryptocurrencies has been divided between proponents of centralized and distributed ledger-based designs. By contrast, e-cash is unique in that it does not involve any common ledger whatsoever.”
Raúl Carrillo, Yale Law School; Director, Public Money Action said that “The E-CASH Act is the most critical component of a broader effort to ensure that the future financial system preserves the accessibility, privacy, and security of our day-to-day transactions,” said Carrillo. “In a world of private payments technologies that do not sufficiently protect financial data, especially the data of people in poor and marginalized communities, this public innovation will set new standards for civil rights within the financial technology sector as a whole.”
The Federal Reserve released a white paper in January 2022 on a potential U.S. central bank digital currency and other digital payment methods, emphasizing the importance of considering a wide range of design options. President Biden recently issued his Executive Order on Ensuring Responsible Development of Digital Assets, which states that the Administration will prioritize research and development efforts in digital currency design, including assessments of financial inclusion, potential benefits and risks for consumers, existing payment systems, and national security.