Dems propose privacy-respecting digital dollar

House Democrats on Monday plan to introduce a law bill that calls for the development of an electronic version of the US dollar that has the same legal status and privacy expectations as physical currency. The bill, titled Electronic Currency and Secure Hardware (ECASH) Act, would direct the US Treasury Department to establish …

[Blank Reg]

The technology already exists as stored value cards. Years ago I even implemented a version that ran on feature phones using Java ME. peer to peer transactions with no middleman. It's fine for low value transactions, but how much are you willing to risk storing on such a device?

[Graham Cobb]

About as much as I am willing to risk storing in my wallet - duh!

[Blank Reg]

I wouldn't even go that far. A wallet has far fewer failure modes than any electronic device.

[An_Old_Dog]

Cash is king, baby!

I like cash.

I don't lose my privacy or the value of my cash due to a flawed encryption algorithm, to flawed software, to flawed hardware, or to the encryption becoming easily-broken by increasingly-powerful computers.

No backdoors, eh? When there are millions of MyMoney devices manufactured and in use, and a flaw/backdoor is discovered, what's our effective recourse?

[codejunky]

Re: Cash is king, baby!

@An_Old_Dog

By any chance a Ramsey listener? The desire to move people to a cashless society is to try and make them spend more. But also it is harder to confiscate what you are holding than electronically cancel you.

Cash is king

[An_Old_Dog]

Re: Cash is king, baby!

@codejunky: I don't know who Ramsey is.

Yet, for DECADES, science fiction has contained examples of how such systems can be misused by the powerful. The one which comes to mind starts with the protagonist putting his does-everything card into a reader and discovering he's been "zeroed." No access to cash, no access to his home (the omni-card is his electronic key), oh, and hey, there's an arrest warrent out on him for something he didn't do ...

You think that couldn't/wouldn't happen? In the 1960s, the FBI, with the cooperation of the major credit-reporting companies in the U.S., entered false, derogatory credit data on "suspected radicals". This was a purely extra-judicial operation. It fucked up their lives for decades. Bad credit, can't buy a house or rent an apartment, or get electricity, gas, water, sewer, or phone service for it.

[codejunky]

Re: Cash is king, baby!

@An_Old_Dog

"I don't know who Ramsey is."

Sorry it was the 'cash is king' phrase that made me guess. If you can ignore the evangelical Christian bits he is really good for planning to get out of debt and build wealth for people who struggle. Often telling people to cut up the credit cards and use cash/debit cards and how to budget.

"Yet, for DECADES, science fiction has contained examples of how such systems can be misused by the powerful"

It makes for a powerful set up because its often enough based on reality. Didnt know about the FBI op, will go look that up later.

[Anonymous Coward]

Re: Cash is king, baby!

Sorry it was the 'cash is king' phrase that made me guess. If you can ignore the evangelical Christian bits he is really good for planning to get out of debt and build wealth for people who struggle. Often telling people to cut up the credit cards and use cash/debit cards and how to budget.

Upvote for the opinion of Dave Ramsey. His heavy evangelizing and conservative politics are fortunately easily dismissable, and lately his promotion of for-fee products on all his platforms is dodgy, but his Baby Steps system works. Just borrow the book "The Total Money Makeover" from the library for all you need to know.

[Anonymous Coward]

Hmmm, privacy respecting?

Guess it will save lobbyists and politicians a fortune. No longer any need to buy brown envelopes.

[Anonymous Coward]

...it's critical for the US not to be left *further* behind.

FTFY.

[An_Old_Dog]

... left *further* behind

Ah, the monkey-brain impulse to "keep up with the Joneses."

Jones gets a new, bigger car, so we 'need' to get one, too.

[Anonymous Coward]

Re: ... left *further* behind

I think at the very least US banks could stop asking individuals to fax them account details for international money transfers. (This actually happened to a friend of mine just last week.)

[IamStillIan]

what's it for?

The goal here seems to be to put huge amounts of effort into making something new for the sake of it. The objective is to make the capabilites and limitations of something match it's predecessor by design.

As side from slightly smaller wallets, whats the point?

[Alpharious]

Re: what's it for?

I suspect they are feeling threatened by crypto and nfts. They should be. What happens when one of the big tech companies makes a nft backed with a share of stock? you have something that is less volatile, and something more easily adopted. If other large companies were to adopt this, you would have a legitimate currency market that is outside of the realm of governments. It's a step closer to syndication. I mean right now it sounds like crazy pulp sci fi but that seems to be the direction that the tech sector wants to go. They want to live in a cyberpunk world.

[IamStillIan]

Re: what's it for?

But this nothing at all to counter that?

[vtcodger]

Investigate -- why not?

Sure, why not investigate?

Personally, I can't see all that much benefit, and I can see some risks. But probably some folks would think that having their "wallet" compressed, digitized, and embedded in their wristwatch or a ring was nifty and convenient. At least until some errant fast food payment register or parking meter accidentally drains their wallet or locks it or the battery dies in the middle of the night on a holiday weekend.

So, by all means. Investigate. Extensively. Before implementing.

[Graham Cobb]

Re: Investigate -- why not?

Those risks are of the same order of magnitude as losing my wallet or having it nicked. It seems reasonable to use it for similar amounts of money as I carry in my wallet.

And it would be very useful to have my cash wallet, and the privacy and low cost overhead, extended to work for internet transactions.

I use cash in supermarkets as a point of principle - neither they, nor my bank, are entitled to track what I buy or what I spend. It is tedious to have to go and get more cash out after every time I go to the supermarket, and this sounds like it might reduce it.

[Anonymous Coward]

Why not just use Interac or whatever the US has for a debit card banking network?

[Graham Cobb]

Did you read the article? Because transaction fees...

[Pascal Monett]

"it's critical for the US not to be left behind"

And take no notice of the countries that are actively banning it, or why.

You wouldn't want to actually have to think of any consequences, now would you ?

[My other car WAS an IAV Stryker]

You'll never get rid of the "third" (or more) party

My financial life is already entirely digital; I don't need whatever this "ECASH" is.

The only time I use cash is to pay my kids' piano teacher, who is a friend from church (we're both on the music team). I pay bills via ACH from the checking account (aka "e-checking") and all in-person and online discretionary spending via debit card. Most of this is through a single third party -- my credit union (member-owned bank) -- although there are a few others.

If said friend and I could agree which payment app to use (PayPal, Venmo, Cash App, etc.) then my contact with cash goes from once weekly to maybe once monthly or even quarterly. But as the article stated, that app becomes a third party (or fourth, since my credit union still has to process the withdrawal, or fifth counting her bank).

If ECASH lets us ditch the app and use phone-to-phone payments, then aren't the phone manufacturers still the third party?

If the manf's. don't implement this in the OS, it will require an app. Who makes it? They're a third party. (If the USGov itself writes the app, I will not trust any claim of privacy, period.)

[Ghostman]

Money loser? Black hole for data?

How is using cash a money loser? There is no transaction fee for using it. Black hole for data? What data is needed to use cash? You total up the sale, enter the amount of cash given to you, give back change. No ID, no SSN, no card needed. No data is passed unless you use a loyalty card.

Nope, a solution with no problem to answer.

[Anonymous Coward]

Re: Money loser? Black hole for data?

That may have been how things worked 100 years ago.

When was the last time you were regularly paid in cash? I haven't been paid in cash since I was 15 - thirty*mumble*mumble* years ago.

If you're not paid in cash, how do you obtain cash from the bank? In person with an ID or a bank card, presumably. I haven't stepped inside a bank in nearly 10 years and will probably never have to again if I don't move abroad.

How often do you carry large sums of cash around with you? At home (Norway) I haven't carried cash for nearly 15 years. It's pretty much gone from my life when I'm not travelling.

[Ian Johnston]

Re: Money loser? Black hole for data?

If you're not paid in cash, how do you obtain cash from the bank? In person with an ID or a bank card, presumably. I haven't stepped inside a bank in nearly 10 years and will probably never have to again if I don't move abroad.

On the few occasions I need to get some "cash" I go to a "cash machine".

Your posting reminds me of a UK computing pioneer, still active on what remains of Usenet. who recently said that ATMs were pointless because he had to queue up in his bank during opening hours to use them. When it was pointed out that ATMs could be used at any time and not only in a bank branch, he replied "ridiculous". Which is how his developing Alzheimer's became clear. Poor sod.

[Anonymous Coward]

Re: Money loser? Black hole for data?

On the few occasions I need to get some "cash" I go to a "cash machine".

Yes, for which you need a "bank card". Which was one of the things the OP claimed was unnecessary if you only use cash.

[NATTtrash]

Re: Money loser? Black hole for data?

Please forgive me a perhaps harsh remark in these days of war raging, but...

Seen the pictures out of Ukraine? (https://www.qwant.com/?l=en&locale=en_GB&r=GB&q=ukraine+queue+ATM)

Or from Russia after those sanctions became active? (e.g. Reuters: https://www.youtube.com/watch?v=5bjkKHchaPs)

So why you think were/ are people queuing at the ATMs when that digital money is so good/ cool/ convenient/ modern {fill_in_your_personal_preference}?

[Anonymous Coward]

Re: Money loser? Black hole for data?

People in Russia were withdrawing Euro and Dollars before their Rubles became worthless.

[Graham Cobb]

Re: Money loser? Black hole for data?

Don't be silly. The proposal isn't to replace bank accounts, or bank cards. It is to replace physical cash with an electronic version but with the same benefits (fungible, no transaction costs, privacy).

The model is the same as cash today but more useful. Retailers would find it more secure (as anyone who does want to track their own cash transactions can easily do so if they choose - so staff will find it harder to skim off from the takings, and no vans full of cash to collect takings). Consumers would find it more convenient (not limited to in-person transactions but usable online as well). "Cash machines" to top-up your cash wallet from your (fully tracked and monitored) bank account would be online instead of finding a hole-in-a-wall ATM.

I use cash whenever I can as a point of principle: I do not want either vendors (such as supermarkets) or governments tracking what individuals choose to buy, nor do I want to have to pay a few % transaction fees (either explicitly or hidden in higher prices). And I have to go to an ATM every week to get some more.

[Irony Deficient]

How is using cash a money loser?

From the perspective of financial institutions (i.e. in the context of Grey’s quote), their workers’ time is required to process cash transactions.

[DS999]

Re: Money loser? Black hole for data?

Cash is clearly a money loser, because not only does it cost more time to accept cash and make change, it makes your business more vulnerable to robbery increasing your insurance premiums.

If cash wasn't a money loser businesses would be doing all they could to encourage their customers to pay in cash rather than use a card, since the card processor takes a 2-4% cut. That cut has been worth it to them because accepting cash has a cost associated with it, as does accepting payment by check.

It is also a money loser for the government, since the cost of printing bills and making coins is nonzero. In the US dollar bills have an average life of approximately 18 months before they need to be replaced IIRC. Larger bills cost governments to the extent counterfeiting is feasible.

[John69]

Have they invented a solution to the double spend problem, or is this just fantasy?

[HereAndGone]

It's a fantasy by bureaucrats with no technical understanding of what's required.

I have no doubt some knowledgeable person told them why what they are asking for can't be done, and I'm just as confident all they heard was, "Blah ... blah ... technical ... blah ... blah".

[Anonymous Coward]

Bring it on.

(Live in USA - spend time in Ireland)

Yes, cash is king. Especially for those of us who run small traveling businesses (record shows, in my case).

And, in the US, there is little to no cost involved in cash. But in Ireland (and perhaps some other countries?) they charge you a fee for depositing cash into the bank. When I found this out recently my head just about exploded. "You mean you are going to charge me for the privilege of giving *you money which you can lend to others and charge them interest???"

E-Cash as explained here would work very well for me.

[OldSoCalCoder]

Re: Bring it on.

Also in U.S., and I just checked a large bank that handles our small business. If cash deposits exceed some threshold per month they charge 0.30 per $100. They'll also charge a cash handling fee if the number of transactions in a month exceeds some other limit. I have no effin idea why they think this is ok, and agree-this is insane to charge me to DEPOSIT money they then lend out and receive interest on.

What came to my mind when I read this is the U.S. banks required to fill out Suspicious Activity Reports on any cash deposit of >= $10,000. How would this e-cash thing work then? How do you say this is going to be peer-to-peer but still observe txs like this? There are several businesses (i.e. pot stores) where I live that regularly make deposits like this.

[MGyrFalcon]

Re: Bring it on.

Just FYI, banks have to file paperwork on any cash transaction >= $8000.00. They dropped the limit a couple years ago. My teller friend at the bank informed me of this when I was pulling cash to purchase a car. ( The dealer kinda freaked out and had to call an associate over to help count it).

Any cash transaction also means just touching it. If you only ask them to run a large amount through the bill counter, that requires the same paperwork. Even for amounts < $8000.00, but significant they are required to ask what you are doing with the money.

Yes, I use cash a lot. One, I’m not a fan of world+dog knowing my purchasing habits, and secondly (removes tin foil hat), it is a very good way to stay on a budget. When I get paid I pull a set amount of cash that will cover groceries, gas, other expected payments for the month and a couple hundred extra for discrecional spending. 20th of the month rolls around and I’m low, no going out to dinner, I’m flush maybe a nice dinner or buy that shiny bobble in the window that caught my eye.

[DS999]

I do not think the US wants to go first here

That laundry list of requirements sounds great, I'm just not certain what they asking for is even POSSIBLE. The bigger problem though is, what if their chosen scheme has a bug which allows someone outside the system to create e-dollars? With traditional counterfeiting the scope of the problem is limited, so while it has long been possible to print your own US currency with varying degrees of quality no one can do it at scale to compete with the real thing.

With e-dollars, who knows? Someone finds a bug allowing them to mint their own e-dollars, and they have the power to crash the world economy. Missing from their list of requirements, but something that needs to be #1 on it, is that it the whole scheme needs to be mathematically proven so there are no worries about a bug in the spec itself that allow for counterfeiting, double spending, or theft.

Even then, you still have to worry about the implementation - and I think the basic protocol that implements the spec should be required to be formally verified - and therefore written in a language that allows for formal verification. The layers above can be written in whatever language is the flavor of the week like Rust or whatever, and have the usual assortment of bugs and security issues, that's fine. So someone might hijack your phone and cause your e-dollars to be transferred but that's nothing new since it can be done now if you use your phone to access your bank account.

That's just maintaining the level of crime we have now, not opening up the possibility of a financial disaster which makes the Great Depression look like a bump in a road that would result from the spec or protocol being p0wned.

I don't think those proposing this realize how dangerous it would be if it isn't done right the first time. There are no second chances if they screw it up. Let's let some small countries be the first to go here, and learn from their successes or failures before committing to anything.

[Anonymous Coward]

It's not about us

This is a way to get money from Washington to someone who doesn't have a bank account without mailing them an envelope of currency.

[scubaal]

cash - ugh

TBH unlike most of the posters here I hate cash.

Havent carried cash for near on 3 years.

Not saying it shouldnt exist - just that it has downsides too - such as getting smacked over head to take it off you - the *costs* of printing, distributing, guarding, recalling, counterfeiting, storing it. Just because the consumer doesnt see the cost doesnt mean there isnt one - its paid for (by your taxes).

So I pay for everything I can with tap-and-go (apple/googlepay - call it what you will). Which works for 99.5% of purchases. In fact my 4 year old grand-daughter want to pay for a hot-chocolate with her own 'dollar-bucks' recently and couldnt - because the coffee stand doesnt take cash. So she's going to need a 'stored value' pocket money card.

So there are trade-offs - like a trace of everything I buy and, although I am not a fan of our current government (Oz) I am not actually paranoid enough to think they care enough about me personally......maybe if I lived elsewhere. Apparently Oz has one of the highest take-ups of swipe-to-pay in the world.

Oh and I pay tax and am not trying to hide stuff from the government.

The thing is I dont see what this 'ecash' has over what we currently have (the swipe card/phone system) - apart from hiding stuff from the 'gummint'?

[Cederic]

Re: cash - ugh

I love being able to leave a cash tip in restaurants.

Buy things when the payment network is down.

Give my cleaner his weekly payment in crisp notes.

Pay for my pizza as it's delivered.

Cash. Underrated.

[Graham Cobb]

Re: cash - ugh

I am more concerned about hiding stuff from the retailer. I do not want my prices to be increased based on how much money I have to spend. I don't want my advertising to be based on what I have previously bought. These are real issues for all of us (whether we choose to care about them or not).

And then there is the government: I have nothing to hide, I am happy to pay my share of taxes (in fact I campaign that taxes on people like me are too low), I am not trying to hide. However, that does not mean that I am willing to authorise them to track me - if my government doesn't trust me (i.e. the majority of people in the country) then how can I trust them? And I am well aware that there are people who need to not be tracked: there are well known cases of abuse by government (strip searching a teenager because she is black? putting a pensioner on a watch list because he attended a protest?), there are campaigning lawyers (e.g. fighting illegal government anti-migrant activity), there are investigative journalists looking into illegal activity by politicians. All those people need to be able to live their lives without tracking. I have a duty to a free society to make sure that using cash is not seen as rare or suspicious.

[a_yank_lurker]

Problem

Somewhere there are ledgers which have all the available cash/credit available to someone. The ledgers that can easily be turned into cash will still register withdrawals against the account. The cash then is not easily traced in principle but using large amounts will get unwanted attention; try buying a car with actual cash.

[usa1]

Democrats support it?

Sorry, but that's a huge red flag for anyone who has been watching the Democrats over the last several years. Fanning race riots, election fraud, defunding the police, mandating vaccines, killing small business for COVID hysteria, CRT, soft on China, grooming kids, don't know what a woman is, etc. The list goes on. They have zero credibility with about 60% of the population in the USA at this point.

It may be the best idea since sliced bread, but the messenger is detested by most Americans.

[Chairman]

Privacy Respecting?

Anything introduced by any Government in not "privacy respecting."