Digital dollars are what most people use every day --- credit and debit cards. When was the last time you paid with actual paper cash?
The only difference with a CBDC in place will be faster processing and lower costs due to realtime interbank transfers that are currently only available from 8AM until 5 PM on weekdays --- weekends and holidays excluded.
I almost exclusively use cash. The exception is for the few things that local stores do not provide and for car insurance. I will remedy some of that soon e.g. Surety Bond. Even then I can still use cash to pay a local transport vendor to drive into a bigger town a few hours away and pick things up for me.
No one is proposing to eliminate the use of physical cash. Nothing about a CBDC requires cash to be eliminated. Any claims to the contrary are pure FUD.
The current paradigm of universally KYC'd accounts, easily surveilled ACH, and a government-run interbank FedWire service already offer complete transparency to law enforcement and the treasury department.
You think your bank can't shut down your account now?
The ability to monitor every transaction you make.
You think your bank and CC company can't do this now?
The only way to avoid being "monitored" is to use cash. And a CBDC won't change this.
It is fundamentally no different than what already exists --- just faster, more capable, more convenient and less costly.
If it's really cheaper, faster more convenient then they'd be enthusiastic about doing it because it would look good for their bottom line.
Money at the end of the day represents trust.
If the Fed is the most trustworthy entity then JPM and Wells Fargo are at #2 and #3. Nobody would care if the #2 and #3 institution exchange money between each other instantaneously and 24/7/365 but only settle their accounts at the Fed weekly or bi-weekly.
This thing for everybody to have an account with the Fed in the form of tokens (digital dollars and digital euros) is something really strange and that nobody has asked for. It is the project of some beurocrat which has seen a topic of interest among the population (crypto) and wants to look good to his superior or wants to claim that "I was at the helm of the team which developed the Digital Dollar".
Some banks do this --- but the utility is severely limited unless all banks and the Federal Reserve do this --- and at low cost. Enter CBDC.
This thing for everybody to have an account with the Fed in the form of tokens (digital dollars and digital euros) is something really strange and that nobody has asked for.
This thing for everybody to have an account with the Fed --- is not what is being proposed. Your bank account will stay right where it is now --- just with new features and capabilities.
No banks will be killed in the production of a CBDC. If it were otherwise, rest assured you would have heard about it from your bank by now.