If the US dollar becomes a digital currency. Why would I ever deposit any of my money into a bank when I could just put it into my digital wallet to be transferred to? Wherever I decide it needs to be transferred just like I would with any other digital currency?
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Banks would not only be able to offer you interest, but your money would also be FDIC insured ($250,000 per account), with just a digital wallet, if you somehow lose it, forget the password, or if someone else steals it, you really don’t have any recourse. However if someone steals your money from a bank, or you forget your password then you’d still have your money.
That’s one of the downsides of a decentralized currency, if there’s no central authority then there’s no one that can help you if you lose your wallet or forget your password. You’re effectively holding bearer bonds, it’s the difference between having a spare credit card in your car with a max spending limit of $5,000 vs having $5,000 in cash just lying in your car.
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