U.S. banking regulations distinguish broadly between deposit-issuing institutions and others. Thus the question whether the digital cash liability of a private company represents a deposit or not determines who might attempt to regulate it or whether it is eligible for federal deposit insurance. Some of these questions here are more important in a non-anonymous digital cash system than in an anonymous one. A depositor who is anonymous, or who wishes his transactions to remain private, is probably not interested in being identified for insurance purposes, or receiving regular bank statements detailing his financial activities. But, that having been said, a look at some representative regulations is important for the purpose of understanding the political and legal barriers to the creation of an anonymous digital cash system.
Digital cash is a balance sheet liability of the commercial banks or companies that issue it.
FDIC deposit insurance, which applies to most bank deposits, can be easily extended to stored value cards under the guise of a general liability account. The stored-value funds in this case are not considered deposits, and are not covered. Again, the stored-value funds are not considered deposits, and are not covered. Non-banks , meanwhile, are not eligible for FDIC deposit insurance. This is something to keep in mind before selecting Salt Lake City as your digital cash base.