https://www.nytimes.com/2022/03/30/opinion/digital-money-pri…
**Does the End of Cash Mean the End of Privacy?**
**by Peter Coy, The New York Times, March 30, 2022**
**...**
**On Monday, Representative Stephen Lynch introduced a bill directing the Department of the Treasury, rather than the Federal Reserve, to develop and experiment with issuing digital dollar technologies “that replicate the privacy-respecting features of physical cash.” The bill is called the Electronic Currency and Secure Hardware Act, or Ecash....**
**Lynch’s idea is for the Treasury to issue cards that have funds stored on them, as with the electronic benefits transfer cards the government issues for the Supplemental Nutrition Assistance Program and other benefits. The difference is that transactions on those benefit cards are processed through the banking system. Transactions on the proposed new Treasury cards would be strictly peer to peer, like cash. Funds could also be uploaded onto phones or other hardware....Presumably, chips on the cards or phones would communicate with chips on other cards or phones or on point-of-sale devices to deliver or receive funds between them. The cards or phones could receive money from one another or be reloaded from bank accounts or with cash....** [end quote]
Notice that Ecash would be issued by the Treasury Department, not by the Federal Reserve. The Constitution give Treasury the task of issuing hard currency, but when the Constitution was written all currency was hard metals. There was no Federal Reserve until December 23, 1913. There was paper currency but it was issued by banks, not by the government, and was only as reliable as the bank where it could be exchanged for hard currency.
Allowing Treasury to create Ecash would give us two uncontrollable sources of fiat currency. I don’t know if the convenience of Ecash would make it easier for the government to shower helicopter money into consumer hands than checks, tax rebates, etc. Unlike the Federal Reserve, which has a legal mandate to control the money supply to prevent runaway inflation, the Treasury (which of course only follows laws passed by Congress) has no such mandate.
Wendy