The future of money might be a digital version of the cash that’s already in people’s wallets—potentially upending the currency system that the world has known for many decades.

Such a future, of course, might be a disappointment to many libertarians and tech-savvy investors who are pinning their hopes (and in some cases their money) on private cryptocurrencies such as bitcoin.

Instead, central bankers and governments—the entities that cryptocurrencies’ backers hoped to render obsolete—are increasingly warming to the idea of “digitizing” their own national currencies. That is, they would issue money that would exist only virtually, without a paper or coin equivalent, and be universally accepted as a form of payment.

Central banks such as the Federal Reserve in essence already issue digital money, via the commercial banks that have accounts with them. Commercial banks then lend money electronically to households and businesses, and enable customers to make and receive payments digitally without exchanging cash. But a central-bank digital currency would be a leap beyond that.

Instead of working only through commercial banks, central banks might issue digital currency directly to the public that could be used as legal tender in the same way cash is today.