[amadeuspagel]

> Normal bank accounts are on the books of the commercial banks. That requires a deposit insurance scheme to make those deposits "money good". Otherwise you end up being an unwitting investor in the bank and subject to losing some or all of your deposit if the bank lends badly.

> A digital currency, at least in the terms generally discussed by central banks at the sharp end, moves your bank account to the books of the central bank, so it is always money good without the need for a deposit insurance system. The commercial bank then operates it as agent rather than principal.

You can have Fed Accounts[1] without a CBDC.

[1]: https://www.slowboring.com/p/fed-accounts