Digital Dollars

Definition ∞ Digital Dollars generally refer to a central bank digital currency (CBDC) issued by the United States Federal Reserve. This digital form of fiat currency would operate alongside physical cash and commercial bank deposits. It aims to provide a secure, efficient, and universally accessible digital payment option. Unlike cryptocurrencies, it would be a direct liability of the central bank.
Context ∞ The concept of Digital Dollars is a frequent subject in economic and crypto news, with ongoing discussions about its potential benefits and drawbacks. Key debates center on issues such as privacy concerns, financial inclusion, and the impact on the existing banking system. Future policy decisions will determine the design and implementation of any US CBDC, considering factors like technological infrastructure and public acceptance. Understanding this concept is crucial for assessing the future of national currencies in a digital age.