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Bank-Issued Digital Dollar

Definition ∞ A digital representation of the US dollar issued by commercial banks. This digital asset functions as a direct claim on a commercial bank, held in accounts or digital wallets. It is distinct from a central bank digital currency, as its issuance and settlement occur within the private banking system. The aim is to leverage existing financial infrastructure for digital payments.
Context ∞ The discourse surrounding a bank-issued digital dollar involves its potential role alongside or instead of a central bank digital currency. Policymakers and financial institutions debate its regulatory framework and its capacity to enhance payment efficiency without disrupting the current financial architecture. Critical future developments include pilot programs and legislative clarity regarding its classification and oversight.

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Regulated Bank Launches Multi-Chain Tokenized Deposit Pilot on Public Ledgers

This pilot leverages public chain infrastructure to create a compliant, FDIC-insured deposit token, optimizing liquidity management and reducing counterparty risk in wholesale payments.