U.S. lawmakers want to give digital dollars a try
Future. A new bill introduced in the House could lead to the creation of e-cash — digital dollars that are as private and liquid as tangible bills. The bill calls for a slate of pilot programs, but if implemented, it could spell the end of paper money as we know it.
A new bill wants to make it rain 1s and 0s.
- A group of Democratic Representatives introduced the Electronic Currency and Secure Hardware (ECASH) Act.
- The act would establish the Electronic Currency Innovation Program (ECIP) to oversee pilot programs on the feasibility of rolling out an electronic version of the U.S. dollar.
- The digital cash would act like actual cash that doesn’t need to go through a bank or credit card company to be used.
- If the bill passes, it would require the Treasury Department to “deploy” e-cash to Americans within four years.
The pilot programs would work in conjunction with universities and financial institutions already studying the effects of digital cash. One test will try out physical cards to store the cash, while another would try out the cash on cell phones.
No wallets in pockets
E-cash is the U.S. government’s response to the rise of both cryptocurrencies and central bank digital currencies (CBDCs). The bill hopes to give Americans a digital alternative to cash that doesn’t generate data or log transactions on a ledger when it’s used. In that sense, it’s cheaper (goodbye gas fees) and more private than crypto.
Meanwhile, CBDCs may still be on the menu for every major economy, and the U.S. is probably a long way out from implementing the tech on a large scale. E-cash would get people into the digital economy way sooner.
And the bill isn’t coming out of nowhere — The Federal Reserve recently released a report that digital cash would be transformative for the underbanked. Representative Jesús “Chuy” García (D-IL), one of the sponsors of the bill, explained that “cash remains our strongest tool to promote financial inclusion while preserving privacy and security. New digital tools should emulate it — not replace it.”