The electronic cash will be a digital equivalent of the United States dollar and could protect anonymity and private transactions, as stated by an advisor on the proposal.
In recent news, a team of U.S. politicians argues the Treasury Department of the United States could be the ideal government agency to develop a digital currency and not the country’s reserve. A new legislation proposed on Monday is already moving in that direction.
Lawmakers Fight For Digital Dollar
Representatives Jesús Garcia, Stephen Lynch, Rashida Tlaib, and Ayanna Pressley initiated the ECASH Act (Electronic Currency And Secure Hardware Act) to prompt the Treasury Secretary to create and issue an electronic version of the nation’s dollar. The purpose is to retain privacy and confidentiality in transactions.
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As specified in the proposal, the digital dollar will be a personal asset that consumers might store on their mobile devices, or it could be a card. This system would not be account-based but rather token-based. This development means that if an individual loses their card or phone, the funds will be lost as well. Simply put, it would be similar to losing a wallet that has dollar notes in it.
This virtual dollar will be declared a legal form of exchange in the country, which users can use the same way the actual greenback is used.
Structure Of The ECASH
An associate professor, Rohan Grey, who teaches at Willamette Institute, was consulted regarding the bill, stated in an interview with CoinDesk that the legislation is aimed to establish a real digital counterpart to the nation’s dollar.
“We’re seeking to create a true cash-like personal asset that will employ a token-based structure. It will not have a distributed or centralized ledger since it does not operate using one. It employs encrypted hardware technology and will be generated by the nation’s Treasury,” Grey added.
This version of electronic cash would permit p2p transactions. Also, due to its structure, it will have support for anonymous transactions and payments. In this regard, it would vary totally from previous plans for a virtual dollar, which were dependent on decentralized ledgers or stablecoins. Blockchains are meant to trace all transactions, and each transaction might be thus traced to both the recipient and sender.
Lynch’s proposition would subject clients to the same strict KYC procedures as anybody attempting to spend cash. People would need to get the digital dollars through a bank account, a retailer, or a p2p transaction and can then choose to do with it as they please.
Grey stated that this approach might benefit those who find it challenging to maintain bank accounts owing to minimum balance restrictions. It will also be beneficial for individuals who lack faith in banks as a result of the heavy charges or account freezing.
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