The U.S. is debating whether to adopt a digital dollar : NPR

A shopper pays cash for sales merchandise on Dec. 26, 2000 in Austin, Texas. The Federal Reserve is considering whether to adopt a digital version of the dollar, in what would amount to a fundamental rethink of our national currency.

Joe Raedle/Getty Images

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Joe Raedle/Getty Images

A shopper pays cash for sales merchandise on Dec. 26, 2000 in Austin, Texas. The Federal Reserve is considering whether to adopt a digital version of the dollar, in what would amount to a fundamental rethink of our national currency.

Joe Raedle/Getty Images

Since its establishment as the country’s national currency, the dollar has undergone many updates and changes, but nothing compares to the proposal being debated today.

The U.S. is gingerly considering whether to adopt a digital version of its currency, one better suited for today’s increasingly cashless world, ushering in what could be one of the dollar’s most fundamental transformations.

In that scenario, the U.S. would not only mint the coins and print paper bills. It would also issue digital cash, or a central bank digital currency (CBDC), that would be stored in apps or “digital wallets” on our smartphones.

We could then use them to pay for things, just like we do with Venmo or Apple Pay, and no actual physical money would change hands.

It’s a vision of a cashless future that other countries are already embracing. China, for example, has already unveiled the digital yuan on a trial basis. India this week said it would also unveil a digital rupee.

Now the U.S. is weighing whether it wants to get into the game.

Last month, the Federal Reserve released a much-anticipated paper, laying out the advantages and disadvantages of a digital currency.

The Fed says it’s a first step, meant to kickstart an important conversation among policymakers and to gather feedback, from average people to some of the country’s largest financial institutions.

Here’s what to know about the digital dollar.

The Apple Pay app is shown on this file photo taken on Oct. 8, 2019. Digital payment systems like Apple Pay and Venmo are becoming increasingly popular.

Jenny Kane/AP

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