Money matters, but most Americans don’t give much thought to its architecture. The Federal Reserve is studying the development of a digital dollar for public use, but money is too important to be left to central bankers. Congress, not the Fed, should set policy for general-purpose digital dollars.
Banks transact in central bank money. The public relies on commercial bank money and on Federal Reserve notes, which are central bank liabilities. A central bank digital currency (CBDC) would be a new Fed liability: digital cash that the public could use, equivalent to a deposit at the central bank.
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