It goes over the pros of a federally-backed digital currency. | Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images

A digital dollar backed by the US government might lead to faster money transfers, and be more accessible than the current banking system, according to a new paper from the Federal Reserve (via CNBC).

The paper is meant to act as “the first step in a discussion,” and doesn’t advocate for actually creating a “central bank digital currency” (or CBDC). Still, the creation of a digital dollar would be a massive shift in how big a role the government would play in our finances. Potential downsides could include making commercial banks less attractive to consumers, and affect the Fed’s ability to influence the financial system. The Fed is now inviting comments, including on anything the paper may have missed.

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