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The Federal Reserve is exploring the creation of a digital dollar, alongside other central banks globally, such as China's ongoing rollout of a digital yuan and Japan's potential launch of a digital yen by 2026. These central bank digital currencies (CBDCs) aim to modernize financial systems and enhance currency stability amid the volatility of cryptocurrencies and recent collapses, like that of FTX. Proponents argue that CBDCs could empower central banks to combat inflation more effectively by providing them with greater control over the money supply, which could lead to faster economic responses. However, concerns regarding privacy and freedom have surfaced in relation to these developments.