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Definition: digital dollar


A transition from the current monetary system in the U.S. to some sort of all-digital system, whether blockchain-based like a cryptocurrency or not. Many fear the digital dollar is meant for government surveillance rather than convenience. The makeup of the ultimate digital dollar is speculation; however, except for cash, the U.S. monetary system is mostly digital already. Money generated by the Fed or residing in banks and other financial institutions is just bits and bytes in a computer. However, if the country switched to an all-digital system, it could mean that cash would no longer be a valid method of payment in the future and not accepted by bona fide retail outlets. See cryptocurrency and CBDC.