Dollar Digitization

Definition ∞ Dollar Digitization refers to the conversion of the United States dollar into a digital format, typically as a stablecoin or a central bank digital currency. This process aims to leverage blockchain technology for faster, more efficient transactions and programmable money. It represents a shift from traditional fiat to a digital representation on distributed ledgers. This evolution seeks to modernize financial transactions.
Context ∞ The concept of dollar digitization is a prominent topic in global financial discussions, with the Federal Reserve actively researching a potential digital dollar. This development could significantly impact payment systems, financial inclusion, and monetary policy, sparking debates about privacy, control, and competition with existing stablecoins. News often covers the progress and implications of these digital currency initiatives.