Suppose some piece of infrastructure along the way lacks a checksum or ECC, and gets hit by a cosmic ray or a hardware defect. You now have +2^17 USD - txamount more or 2^19 - 2^18 USD + txamount less in said account. Throw FDIC insurance out the window because they're probably a) not going to do it and b) stick you with fees and losses.

This seems interesting, but I doubt this would be a vulnerability of any properly redundant digital coin.

Anywhere non-ECC storage or computation occurs before it hits hashing or distributed, it's a SPoF.

…I imagine the whole thing wouldn’t be running off a single server + hard drive. There’s not any conceivable system design where this bit flip would be possible

If it truly is a dollar (which seems like what they're aiming at given UTxOs, etc), there's no recourse for the dollars (tokens) themselves - much like dollars today.

They currently destroy old bills and print new ones into circulation, so destroying black listed funds and sending the legal owner newly minted ones sounds right