- A digital dollar is a third type of currency that employs digitally tokenized 'dollars' (just a unique identity) to settle transactions immediately between people, businesses, and across borders.
- A master ledger, or single source of truth (governed centrally by the Fed or in a more distributed, rules-based model like a blockchain network), would track the history of every single transaction and verify the unique ID of each digital dollar to ensure legitimacy and allow funds to be transferred instantly from wallet to wallet.
- The Federal Reserve would manage and back the supply of digital dollars, just as it does with the currency.
Read More: How can banks benefit from cryptocurrency?
