Mishi Choudhary, legal director of Software Freedom Law Center, supported efforts by some US lawmakers to develop an electronic version of the US dollar.
In written testimony for a Thursday House Financial Services Committee hearing on digital wallets, Choudhary said the United States needed “an electronic currency or token that is functionally equivalent to cash, that offers all of its benefits, including anonymity, privacy, autonomy, no transaction fees, and that addresses all of its flaws.” “. His description suggested a token with many of the benefits of a central bank digital currency and cryptocurrencies, but without traceability, similar to the e-cash proposed by Rep. Stephen Lynch in a March bill.
“The unique element of the ECASH idea is the hardware wallets that contain the equivalent of the currencies created and managed by the US Treasury, which is as close a form of universal access as cash,” Choudhary said. “This idea envisions how everyone can hold, store and pay with money without the banking system getting involved at all. The idea is to have electronic tokens that are equivalent in functionality to cash and are no longer traceable.”
Choudhary added that the goal of this e-money proposal would be to preserve privacy and enhance financial inclusion, while allowing the public to access the software underlying the technology in the interest of transparency. Raúl Carrillo, deputy director of the Law and Political Economy Project and one of the witnesses at the hearing, said that, unlike cryptocurrency, e-cash would not be used to make online payments, and could be lost along with lost hardware. .
The proposed electronic money would not be based on a blockchain or require the Internet to function, but Illinois representative Bill Foster pointed to a lack of property information as a potential concern around illicit transactions, ie know-your-customer (KYC) requirements. Choudhary hinted that a lack of regulatory clarity could prevent the United States from becoming a leader in digital transactions, as other jurisdictions have tried to address problems in this area.
“The European Union has taken a very different approach to cryptocurrency transactions, including information about the parties involved and describing anonymous cryptocurrency transactions for now,” Choudhary said at the hearing. “That has obviously raised the concern of how much innovation will come out of [la] European Union if the same type of KYC issues overlap. Major crypto companies have now at least unveiled initiatives that are improving the industry’s KYC and Anti-Money Laundering practices.”
Many US lawmakers have come out in favor of the Federal Reserve launching a central bank digital currency or backing cryptocurrency adoption at the state level. In January, the Federal Reserve published a discussion paper on the benefits and risks of a digital dollar, while In November 2021, the President’s Task Force on Financial Markets urged lawmakers to consider stablecoin legislation to address potential risks.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.