Lawmakers have introduced a bill that would allow the US Treasury to create a digital dollar

• US lawmakers proposed a bill for a digital dollar that would be issued by the US Treasury, instead of the Federal Reserve.
• The digital dollars in this case would operate separately from any blockchain technologies, unlike cryptocurrencies.

Four US lawmakers proposed a new bill Monday that would authorize the Treasury Department — rather than the Federal Reserve — to create and issue an electronic dollar.

The "Electronic Currency and Secure Hardware Act," or ECASH Act, proposed by Democratic representatives Stephen Lynch (Massachusetts), Jesús Chuy Garcia (Illinois), Ayanna Pressley (Massachusetts) and Rashida Tlaib (Michigan), would allow for a digital dollar that preserves privacy and anonymous transaction.

According to the bill, the digital dollar would be token-based, and held on your card or phone. But because it wouldn't be account-based, losing the card or phone that stores the tokens would mean you also lose your funds.

The electronic dollar, in this case, would be functionally identical to a physical dollar and support peer-to-peer, anonymous transactions, per Coindesk.

Under the ECASH Act, digital dollars would operate separately from any blockchain technologies, unlike cryptocurrencies. But they would serve people who can't hold traditional bank accounts due to minimum balance requirements.

Meanwhile, China's central bank digital currency has been used for billions of dollars' worth of transactions already. By November 2021, more than 140 million people had opened digital wallets for the digital yuan, or eCYN — up from 21 million in July.

Additionally, over 10 million corporate accounts have been created for the eCYN, per Bloomberg.

While the US is not close to China in the central bank digital currency race month, the Biden administration issued a cryptocurrency executive order this month, with the aim of exploring the creation of a digital dollar for the Federal Reserve.