[rahimnathwani]

The dollar is a central bank currency.

Numbers in a retail bank's ledger are not digital dollars. They represent an obligation of the bank, and not direct ownership of dollars.

Digital dollars exist, but only banks can hold them, as they're the only ones with accounts at the central bank. The rest of us use retail bank accounts, which are the equivalent of custodial wallets in the crypto world.

[JumpCrisscross]

> dollar is a central bank currency

The term "dollar" encompasses central bank money (including but not limited to banknotes) as well as private money.

> Numbers in a retail bank's ledger are not digital dollars

Yes, they very much are. Modern money creation is public-private and only semi-centralized.

[rahimnathwani]

This is correct in practice. But consider what I said in the context of the discussion: contrasting 'digital dollars' with cryptocurrencies.

With dollars, individuals have to choose between bank accounts, which are subject to counterparty risk, and cash, which cannot be transacted digitally.

If your holding of 'digital dollars' in a bank account is subject to counterparty risk, then there's something different about the dollars you hold and 'real' dollars issued by the central bank.

With cryptocurrency, anyone can transact the real thing. There's no counterparty risk. (Of course, there are issues with blockchain scaling, use of custodial wallets etc., which negate this to some extent.)

[warkdarrior]

> With cryptocurrency, anyone can transact the real thing. There's no counterparty risk.

This only holds true if there was only one cryptocurrency in the world and everyone used self-custody. As soon as you have multiple cryptocurrencies and multiple networks and multiple wallet providers, you have counterparty risk.

Coinbase may not disappear, but others may. Similar for Bitcoin etc. etc.

[rahimnathwani]

> "if ... everyone used self-custody"

I said 'anyone can', not 'everyone does'.

> "disappear, but others may. Similar for Bitcoin"

The risk of the bitcoin blockchain disappearing, and your BTC holdings thereby becoming worthless, is not an instance of counterparty risk.