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.