Legislators introduce e-cash to digitise the American Dollar

*The United States Congress says introduction of electronic cash (e-cash) will stop merchants from charging additional fees regarding interoperability, security, privacy, data collection, and others for using the financial product in a move to protect consumers

Isola Moses | ConsumerConnect

Sequel to United States (US) President Joe Biden’s recent Executive Order about cryptocurrency, the administration officials are looking to create an electronic version of the US Dollar that consumers will use much like they use the money they have in their pockets.

ConsumerConnect gathered US Representative Stephen F. Lynch (D-MA), Chairman of the Task Force on Financial Technology, is the congressional official behind the idea.

He recently introduced H.R. 7231, the Electronic Currency and Secure Hardware (ECASH) Act on Capitol Hill.

US Congress

The Congressman thinks his idea would give consumers the kind of protection and data privacy they want while providing a smoother in-road that would allow the country to develop and regulate digital assets, agency report stated.

Lynch’s bill would create a pilot programme run by the Treasury that could grow organically after an introductory phase, but limits would be placed on how much digital cash could change hands.

He also framed the pilot programme as a place for “smaller anonymous cash-like transactions.”

Congressman Jesús “Chuy” García (D-IL) further said: “My neighbourhood 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.”

How American e-cash would work

The concept of e-cash is actually pretty simple; all people have to do is reframe how they think of cash and embrace a digital version of it.

It would still be considered legal tender that is created and issued into circulation by the Treasury, and it would be payable to the bearer just like a paper check is.

How transactions would be made: E-cash would be distributed via hardware devices, like a smartphone.

Accessibility: Accessibility is an issue the bill’s sponsors have already considered. In their outline, they said that usability for individuals with disabilities, low-income individuals, and communities with limited access to internet or telecommunications networks would all be taken care of.

Privacy: With all the data privacy issues that run amok, privacy could be a tall order. However, Lynch’s outline of the bill says that e-cash must “be distributed through secure hardware devices that are secured locally via cryptographic encryption or other similar technologies and cannot contain personal identifiable information or be subject to surveillance, transactional data collection, or censorship-enabling features.”

Consumer Protection: The legislators said they would stop merchants from charging additional fees for using e-cash.

They also said any disclosures that the government or any third-party authorised to distribute regarding usage, fees, interoperability, security, privacy, data collection, etc. has to be easy to understand and free of elaborate legalese.

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