E-Cash Digital Collar In The Works

In a move that could bring digital currencies one step closer to the mainstream, the chairman of the House Financial Services Committee’s fintech task force has introduced a bill to create a new sort of digital currency called “E-Cash.”. The United States Department of the Treasury is required by the Electronic Currency and Secure Hardware Act to “develop and test digital dollar technologies that have the same privacy-protecting characteristics as physical cash.”

It is still unclear how exactly the E-Cash digital dollar would work or what it would look like since the proposed legislation provides a few clues. However, the bill states that transactions would be settled without the need for a blockchain or internet connection. This suggests that E-Cash would not be based on blockchain technology.

Additionally, it will not have the same features as a central bank digital currency (CBDC), according to the bill. Unlike CBDCs, the E-Cash digital dollar would be a different sort of technology stack and solution.

Moreover, the legislation directs the Treasury to “explore the full gamut of potential designs” and to “simultaneously test with a variety of pilot ideas.” This suggests that the digital dollar would be developed through a process of trial and error. The Treasury Department would experiment with different designs and technologies before settling on a final product.

According to the E-Cash website, the currency is “designed and administered to replicate to the greatest extent feasible and practically possible the anonymity and privacy-respecting characteristics of real cash.” Moreover, according to its supporters, it is a digital currency that may be used for anonymous, offline, peer-to-peer transactions.

Continue Reading

U.S. Federal Reserve Bans Employees From Trading Crypto, Bonds And Stocks

The Federal Reserve banned senior officials from engaging in several forms of active trading, finalizing a sweeping series of changes to its ethics rules after several Fed officials it became engulfed in controversy over their trading actions. 

Since September, three top Fed officials, including former Vice Chairman Richard Clarida, have resigned since disclosing trading activity at the start of the pandemic. The disclosures led to a widespread backlash, and prompted Fed Chair Jerome Powell to order a review of the ethics rules for top officials.

The new rules were previewed in October, and “aim to support public confidence in the impartiality and integrity of the Committee’s work by guarding against even the appearance of any conflict of interest,” the central bank said in a statement

The Federal Open Market Committee announced on Friday that it had unanimously adopted the guidelines, which go into effect on May 1. These prohibit senior officials from purchasing individual stocks or sector funds, shorting a stock, entering into derivatives contracts, or purchasing securities on margins. They also prevent them from holding individual bonds, agency securities, cryptocurrencies, commodities or foreign currencies.

In addition, senior officials will be required to provide 45 days’ notice before selling or buying securities and obtain approval for the transactions. They will need to hold investments for at least one year. The requirements for advance notice and pre-clearance take effect on July 1. 

The committee will also extend a blackout trading period running up to regularly scheduled FOMC meetings by a day after each meeting.

People covered by the rules range from Fed Board members and Reserve Bank presidents to Reserve Bank first vice presidents, research directors, staff officers, and any other person designated by the Chair—and their spouses and minor children. 

When the changes take effect, Reserve Bank presidents will be required to publicly disclose any transactions within 30 days, as Board members currently do. Officials have 12 months from when the rules take effect to dispose of any impermissible holdings.

Continue Reading