WASHINGTON—A number of members of Congress are urging creation of a central bank digital currency—but without the central bank.
The lawmakers are proposing that the so-called digital dollar be issued by the Treasury Department rather than the Federal Reserve.
Reps. Stephen Lynch (D-MA), Jesús Chuy Garcia (D-IL), Ayanna Pressley (D-MA) and Rashida Tlaib (D-MI) have introduced the "Electronic Currency And Secure Hardware Act" (ECASH Act) to direct the Treasury Secretary to develop and issue an electronic version of the U.S. dollar, with an eye to preserving privacy and anonymity in transactions.
The electronic dollar, as defined in the bill, would be a bearer instrument that people could hold on their phone or a card, according to CoinDesk. The system would be token-based, not account-based, meaning if someone were to lose their phone or card they would lose the funds. In other words, it would be like losing a wallet with dollar bills in it, CoinDesk stated.
“This electronic dollar would be deemed legal tender and be functionally identical to a physical greenback,” the report added.
‘True Digital Analogue’
Rohan Grey, an assistant professor at Willamette University who consulted on the bill, told CoinDesk the bill is meant to create a true digital analogue to the U.S. dollar.
“We’re proposing to have a genuine cash-like bearer instrument, a token-based system that doesn't have either a centralized ledger or distributed ledger because it had no ledger whatsoever. It uses secured hardware software and it's issued by the Treasury," Grey was quoted as saying.
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