Right now, you likely keep your money in a bank account, where it exists digitally. But what if some of your funds could live in an account run by the Federal Reserve, and you could access it with a digital wallet? That’s the basic idea behind a digital dollar, and experts hope it will fix some of the problems in traditional banking. 

The banking system is experiencing an existential threat in the digital age, forcing it to either innovate, or face disruption. In response, two groups in the US are now researching how to build what’s known as a central bank digital currency (CBDC)—a digital dollar—to compete against private cryptocurrencies such as stablecoins, which are crypto assets pegged to the US dollar to stabilize their value. 

One of the CBDC projects in the US is helmed by MIT and the Federal Reserve Bank of Boston, and the other by The Digital Dollar Foundation and Accenture.

Currently, the…

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