A bill directing the US Secretary of the Treasury to develop and test an electronic version of the US dollar that is not a cryptocurrency and yet is simple to use for those who are economically disadvantaged or technologically handicapped has been introduced. This bill was introduced on Monday when the United States House of Representatives presented the Electronic Currency and Secure Hardware Act (ECASH Act).
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 effort isn’t intended to prevent a Central Bank Digital Currency (CBDC) from being issued by the federal government. According to Lynch, the ECASH Act’s pilot program 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.”
The CBDC project, on the other hand, has made substantial progress. The digital dollar set a record speed of 1.7 million transactions per second (TPS) in one of two recent pilot tests, far quicker than most crypto networks.
The CBDC initiative is still in its early phases, according to CNBC, and is nicknamed ‘Project Hamilton.’ It’s being built in such a way that it’ll be able to resist transaction outages caused by server outages and other problems. As a result, the major purpose of ‘Project Hamilton’ is to address the worldwide CBDC sector’s technological and regulatory issues.
The conceit of cryptocurrency a downer
The United States Treasury Department, not the Federal Reserve Boar As a result, it is intended to “replicate the privacy-respecting aspects of actual cash,” such as coins and notes, as closely as feasible.d, would issue e-cash, as previously stated. As a result, it would not be a CBDC or cryptocurrency.
The electronic dollar would be a digital token—a bearer instrument similar to paper currency—rather than a cryptocurrency or CBDC based on blockchain. This means that if it’s misplaced, it’s lost forever.
The e-cash would be legal tender, and transactions would not require internet access. This type of e-cash, on the other hand, would allow for peer-to-peer transactions.
Users would not be subject to the same strict know-your-customer [KYC] procedures as anyone trying to use cash, according to Lynch’s plan. They can obtain e-cash dollars through a bank account, a peer-to-peer transaction, or a retailer, and then use them for anything.
This has the potential to benefit people who are unable to open bank accounts due to minimum balance limitations. The adoption of e-cash would be aided in the same way.
Within 90 days of enactment, the measure calls for the implementation of a two-phase e-cash pilot program. In reality, no later than 48 months following enactment, e-cash will be available to the general population in the United States.