The Federal Reserve and Treasury oppose issuing digital currency to ordinary citizens. That burdens the economy, handicaps fiscal policy, and threatens the international status of the dollar.

Money must be something people universally accept and can't be easily created but still increases in supply with the growth of commerce.

The Eastern woodlands Indians made shell wampum from difficult-to-fashion clam and whelk shells only found along the Long Island Sound and Narragansett Bay.

In 17th Century London, goldsmiths created modern banking by holding gold and sovereign coins for safekeeping and making loans against their value by issuing transferrable notes and charging interest.

Those evolved into modern banks that took coins and paper currency to issue business and consumer checking accounts. When banks make loans, money exists in two places at once — on the balances of checking accounts for both depositors and borrowers.

National central banks took responsibility for protecting depositors and ensuring the supply of credit by requiring banks to keep a portion of their deposits on reserve. Virtually all reserves are kept at central banks.

Bank-sponsored credit cards came into use by charging transactions fees-about 1.5% to 3%. Those assure payment-checks can bounce whereas a portion of those fees insure payments of all charges. The system is now digital-central and commercial banks keep electronic ledgers, and we pay bills on computers and smartphones.

Unlike transactions among businesses and consumers that pass through bank ledgers, most bank-to-bank transactions are scored on electronic ledgers directly at the Fed. The latter are terribly low cost, fast and secure.

The Fed pays interest on bank reserves, and ordinary folks pay banks fees for the privilege of accessing the system. Often it takes days instead of minutes for private transactions to clear through credit card systems and among banks.

The Fed could grant consumers and businesses direct access to digital money by permitting them to establish non-interest paying checking accounts at its 12 regional banks. Block-chain technology could permit private transactions to be virtually costless, terribly fast and absolutely secure. The economy would run with less friction and many fewer credit-card fees.

Banks could continue to obtain funds by offering interest-bearing certificates of deposit and make direct loans, which would generally be outside the purview of the Fed.

When the economy requires stimulus, the Fed could inject funds directly into consumer accounts on behalf of the Treasury — likely more quickly than through the IRS.

Central banks in Sweden, Canada, Switzerland and the Caribbean have experimented with or are studying digital currencies, and China is planning on issuing digital yuan quite soon.

Digital dollars are already in use among banks and to enable global commerce.

The United States accounts for only 8.8% of global exports but 40% of global trade, and 88% of all foreign-exchange transactions are denominated in dollars-for example, converting Mexican pesos into Japanese yen is usually accomplished by trading pesos to dollars and then to yen.

Citibank and other banks worldwide that take dollar deposits provide the plumbing and make the dollar a strategic tool for U.S. foreign policy. By denying access to U.S. banks and payment systems, the Treasury is smothering Iran's economy.

In the eyes of our allies, the Trump administration overuses this weapon. For example, applying it to Iran when the United States, not Iran, withdrew from the nuclear treaty, and on the construction of the Nord Stream 2 natural gas pipeline from Russia to Germany.

The Fed reacted with great alarm when Facebook announced plans last year to introduce Libra, a block-chain-driven digital currency backed by a basket of currencies such as the dollar, yen, pound and yuan. U.S. regulators pressured MasterCard, Visa and eBay to suspend participation.

Another entity-domiciled in China or a Caribbean island-could just as easily establish a similar system. Libra does not have to run on the Facebook platform or involve franchises like MasterCard and Visa.

Our allies and adversaries have been looking for ways around the dollar payments system and a digital yuan or hybrid currency like Libra could be just that and supplant the supremacy of the dollar.

Then Beijing not Washington could be applying financial sanctions and calling the tune.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1