Such a system would very much compete with deposits in banks, given that savings account interest rates are already effectively zero. So why would a person give

Such a system would very much compete with deposits in banks, given that savings account interest rates are already effectively zero. So why would a person give their money to a bank instead of keeping it in their DigitalDollars wallet? They would have no reason to do so, unless keeping their money as DigitalDollars was somehow worse. If keeping money as DigitalDollars is worse, then nobody would want to have them except possibly briefly for transactions, making it more of a payment network than a currency, and pretty ineffective as a monetary policy tool. Plus I have zero confidence that the Fed would be able to competently implement such a system to get the benefits they want. they would end up with a system that is somehow slower, less reliable, more fraud prone and more expensive than paying with a debit card.