Cashu ecash: A Market-Driven Evolution of Digital Money

Cashu eCash reintroduces digital bearer money on Bitcoin, enabling private, instant transactions while opening the door to credit and financial innovation. The system offers a new frontier for Bitcoin payments, shaped by market dynamics and user-driven solutions.

There are at least two distinct eCash protocols—Fedimint and Cashu—both designed to issue Bitcoin eCash.

The article emphasizes Cashu’s unique approach: its model lets each mint independently set risk parameters, enabling practices like fractional reserve banking (issuing more eCash than the mint holds in on-chain reserves).

This could theoretically increase the money supply in circulation but risks devaluing the mint’s eCash if doubts about its reserves emerge.

While exchanges already operate similarly, eCash adds privacy protections absent in traditional systems.