NY Federal Reserve and major banks announce 'digital dollar' pilot program, setting off alarm bells

The Federal Reserve Bank of New York and a host of major banks announced Tuesday a pilot program for a "digital dollar," raising new concerns about the potential shift to a centralized digital currency.

What are the details?

The 12-week test will explore a digital money platform that "operates exclusively in U.S. dollars where commercial banks issue simulated digital money or 'tokens' — representing the deposits of their own customers — and settle through simulated central bank reserves on a shared multi-entity distributed ledger," a press release explained.