Turns out they try to make you spend it by continually inflating the supply of them out there with no end. In order to keep your head above water, you have to put in a "bank".
Fine, it compensates you for the loss of purchasing power, so no biggie, right? Wrong. They actually lend out the dollars that are supposed to be in your account so when you come to get your dollars out, they might not even be there!
Now, they claim to have this handled, but it's kind of a hacky solution: supposedly what happens is that they'll go to a head honcho and get a temporary loan to be able to pay you, but they only give this privilege those that can get the political connections.
They also have have this system where you money is "insured" so that even if they can't get a loan "your dollars are safe, you'll still be able to get them out!" Kludgy, but it should work, right? Well, it turns out the insurance fund couldn't actually handle everyone pulling their money back out!
So, yeah, kind of hip, but I don't think it can catch on as a serious model, especially once auditors and whatnot get involved.
"those that can get the political connections" ... if you have the capital and do the paperwork and follow the regs, you can start a bank and get access to the discount window.
"insurance fund couldn't handle yada yada yada" ... the FDIC is implicitly backed by the full faith and credit of the US government. As long as the Treasury exists and has the ability to tax and borrow, your deposit is money good up to FDIC limits.
if you're going to invent new money, makes sense to understand the existing money, and try not to invent something worse.
Not true. There's this little extra step where first the regulatory authority gets to decide whether your state needs another bank.
This is a rather good record compared to bitcoin.
You shouldn't play a shell game with the money and say then say there are "zero losses", but people do. It's called cognitive dissonance and it sucks.