On March 28, Representative Stephen Lynch (D-MA), along with co-sponsors Jesús G. García (D-IL), Rashida Tlaib (D-MI), Ayanna Pressley (D-MA), and Alma Adams (D-NC), introduced H.R. 7231, the Electronic Currency and Secure Hardware Act (ECASH Act), which would direct the secretary of the U.S. Department of the Treasury (not the Federal Reserve) to develop and issue a digital analogue to the U.S. dollar, or “e-cash,” which is intended to “replicate and preserve the privacy, anonymity-respecting, and minimal transactional data-generating properties of physical currency instruments such as coins and notes to the greatest extent technically and practically possible,” all without requiring a bank account.
E-cash would be legal tender, payable to the bearer and functionally identical to physical U.S. coins and notes, “capable of instantaneous, final, direct, peer-to-peer, offline transactions using secured hardware devices that do not involve or require subsequent or final settlement on or via a common or distributed ledger, or any other additional approval or validation by the United States Government or any other third party payments processing intermediary,” including fully anonymous transactions, and “interoperable with all existing financial institutions and payment systems and generally accepted payments standards and network protocols, as well as other public payments programs.”
The bill includes requiring the secretary of the treasury to establish an Electronic Currency Innovation Program (ECIP), to be overseen by a director appointed by the president, with the advice and consent of the Senate, for a term of five years. The legislation also involves the creation of a Digital Dollar Council to coordinate ECIP-related activities with other federal regulatory bodies, which would be comprised of the secretary, the director of ECIP, the chairman of the Board of Governors of the Federal Reserve System, the postmaster general of the U.S. Postal Service, the director of the Office of Science and Technology Policy, the chief technology officer of the United States, and the director of the National Institute of Standards and Technology, and any other federal employees or representatives of federal agencies as the secretary determines to be appropriate.
The introduction of the ECASH Act comes on the heels of Senators Kristen Gillibrand (D-NY) and Cynthia Lummis (R-WY) recently announcing they will introduce bipartisan legislation in the near future covering a broad range of digital assets topics, including those addressed in the recent executive order to establish the first comprehensive federal digital asset strategy for the U.S., privacy, safety and soundness, consumer protection, and the taxation of digital assets, including cryptocurrencies.