Is someone confused here? Isn't the dollar already the digital currency of the Federal Reserve and the international banking system?
The dollar is a digital currency pretending to be a physical currency for the naive.
Really I think the article is asking for a payment system that has Bitcoin-like qualities (irrevocable, low or no fee, immediate settlement, cryptographically secure, auditable) yet is denominated in USD. Something like Dwolla or (as somebody else mentioned) a consumer version of Fedwire.