Definition ∞ Digital dollar accounts refer to electronic accounts that hold and transact in a digital representation of the US dollar. These accounts could potentially be offered by commercial banks or even directly by a central bank, providing a digital alternative to physical cash and traditional bank deposits. They aim to facilitate faster, more efficient payments and potentially broaden financial inclusion. The digital dollar in these accounts would maintain a one-to-one parity with the fiat US dollar.
Context ∞ The concept of digital dollar accounts is a central point in the ongoing debate about a potential US Central Bank Digital Currency. Policymakers are evaluating the implications for monetary policy, financial stability, and privacy. A critical discussion involves whether these accounts would be direct liabilities of the Federal Reserve or intermediated through commercial banks. Future developments depend heavily on legislative decisions and the public’s appetite for a government-backed digital currency.
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