Cryptocurrency: CBDC Digital Fiat WARNING BELLS GOING OFF

grarpamp grarpamp at gmail.com
Sun Mar 19 21:03:48 PDT 2023


Fed Announces Launch Of 'FedNow' Real-Time Payment System, Sparking Debate

https://www.theepochtimes.com/fed-announces-launch-of-fednow-real-time-payment-system-sparking-debate_5127490.html
https://www.federalreserve.gov/newsevents/pressreleases/other20230315a.htm
https://www.federalreserve.gov/newsevents/speech/bowman20220817a.htm
https://www.theclearinghouse.org/payment-systems/rtp
https://twitter.com/JordanSchachtel/status/1636142181428649987
https://www.pymnts.com/news/security-and-risk/2023/fednow-says-features-will-help-fis-raise-the-bar-on-fraud-management/
https://twitter.com/matthewstoller/status/1619070335550382082
https://www.paymentsdive.com/news/fednow-faster-realtime-payments-nonbanks-crossborder/634434/
https://emmer.house.gov/_cache/files/b/6/b6b2f564-ffba-438f-9eae-07e285de6b67%2f100CD5669E9975688EE2657DCF28033E.emmer.cbdc.2023.pdf
https://emmer.house.gov/2023/2/emmer-leads-effort-to-squash-financial-surveillance-state-initiatives

The Federal Reserve has announced a timeline for the launch of its
long-awaited FedNow payment service that will let banks offer
customers instantly available funds and execute real-time payments,
with critics flagging concerns like lack of cross-border payment
processing and raising questions about surveillance.

The Fed announced on Wednesday that it will begin formal certification
of participants in the FedNow system in April in anticipation of a
July launch.

First announced in 2019, FedNow will allow banks to instantly transfer
payments across the financial system.

    “With the launch drawing near, we urge financial institutions and
their industry partners to move full steam ahead with preparations to
join the FedNow Service,” Ken Montgomery, first vice president of the
Federal Reserve Bank of Boston and FedNow program executive, said in a
statement.

As banks and other financial institutions join the program, this will
create a growing network with clearing and settlement features that
lets businesses and individuals send and receive instant payments at
any time of day.

Recipients using the system will have full access to funds
immediately, making it easier to make time-sensitive payments.

Some analysts have said that FedNow could reduce demand for payday
loans because customers who use the system would receive their pay
immediately, without having to wait for checks to clear.

    “The launch reflects an important milestone in the journey to help
financial institutions serve customer needs for instant payments to
better support nearly every aspect of our economy,” Tom Barkin,
president of the Federal Reserve Bank of Richmond and the FedNow
Program’s executive sponsor, said in a statement.

The system will have the capacity to support various types of
transactions: consumer-to-consumer, consumer-to-merchant,
merchant-to-merchant, and bank-to-bank.

Fed governor Michelle Bowman said last year that FedNow could offer
some of the same benefits as a central bank digital currency (CBDC)
and thus weakening the case for the adoption of a CBDC, which is,
anyway, years away in the United States.

During congressional testimony in early March, Fed chair Jerome Powell
was asked by a lawmaker whether there’s an advantage to the FedNow
payment system over a CBDC or stablecoins that also tout faster
payment services.

    “A CBDC is going to be years in evaluation,” Powell replied.

    “And I think we can get this into the hands of the public very
quickly, and we’ll have real-time payments in this country very very
soon.”

FedNow “will enable all the banks—any bank in the United States, not
just the big ones—to offer instantly available funds and real-time
payments to their customers,” Powell said before the House Financial
Services Committee on March 8. “That’s a great thing.”

A similar private-sector payment system that offers instant settlement
features like FedNow has been around since 2017.
Reactions

The Fed’s announcement of a timeline for the launch was met with mixed
reactions. Some sought to draw equivalence between FedNow and a CBDC.

    “Right on schedule. Here is your CBDC launch,” Lawrence Lepard,
investment manager at Equity Management Associates, stated in a tweet.

Scott Santens, author of the book “Let There Be Money,” disputed this
characterization, arguing in a series of tweets that FedNow doesn’t
have any smart contract ability and is not equivalent to a digital
dollar.

    “FedNow implementation is one of the arguments against launching a
CBDC. It’s so not a CBDC that it actually reduces the odds of starting
a CBDC,” he wrote on Twitter.

    “If conspiracy theorists who are afraid of CBDC had any sense at
all, they’d argue that FedNow obviates the need for a CBDC. They’d
welcome FedNow as an alternative that already exists, so don’t do a
CBDC. But they have no sense,” Santens added.

Jordan Schachtel, publisher of The Dossier on Substack, raised
concerns about surveillance.

    “FedNow appears to be a prototype CBDC,” he stated in a tweet.
“While instant, 24/7 payments seems good, there’s implications to
leaning into credit-based system. FedNow can quickly transform to a
surveillance system.”

    “Does FedNow have AI or human circuit breaker managing it? FedNow
is a giant red flag,” he added.

According to a review of FedNow by PYMNTS, the new platform might,
over time, incorporate anti-fraud features that “could provide the
ability to fine-tune controls for different types of customers and
screen non-value messages, such as requests to send payments to
potential bad actors.”

    “Other updates under consideration would leverage the FedNow
Service network to monitor for aggregated concentrations of inbound
and outbound activity (a sign of potential mule activity) and use
machine learning to score transactions,” PYMNTS noted.

The Fed said in its announcement that the service will launch with a
“robust set of core clearing and settlement functionality and
value-added features” and that that enhancements would be added in
future releases including ones related to “safety, resiliency and
innovation.”

Matt Stoller, director of research at the American Economic Liberties
Project, welcomed FedNow as a better alternative to currently used
payment systems.

    “The administration needs to push the Fed to get FedNow working
ASAP. It’s just ridiculous the U.S. payments system is so corrupt and
expensive, versus the fast and efficient systems of almost everywhere
else,” he wrote in a tweet.

Payment systems used in the United States face criticism for lack of
interoperability, high transactions fees, and slow processing times,
which in some cases can take several days.

Rina Wulfing, policy and campaign manager for London-based
cross-border payments company Wise, said that a shortcoming of the
FedNow system is that it doesn’t include nonbanks and cross-border
payments.

    “Unfortunately, the current framework does not address the other
most pressing issues in the U.S. payments system,” Wulfing wrote in a
recent op-ed. “By not including nonbanks and cross-border payments,
FedNow puts itself at risk for success and doesn’t take into account
the needs of U.S. consumers. ”

CDBC Controversy

Controversy has surrounded the adoption of CBDCs, with House
Republicans warning of the risk that they could amount to an
“authoritarian-style” and “surveillance-style” digital dollar.

House Republicans recently introduced the CBDC Anti-Surveillance State
Act that would restrict the “unelected bureaucrats” from establishing
and issuing a CBDC that they say would threaten the financial privacy
of the American people.

    “Any digital version of the dollar must uphold our American values
of privacy, individual sovereignty, and free-market competitiveness,”
said House Majority Whip Tom Emmer (R-Minn.) in a statement.

    “Anything less opens the door to the development of a dangerous
surveillance tool.”

Rep. Warren Davidson (R-Ohio) argued that the Fed must concentrate on
its dual mandate—price stability and maximum employment—instead of
“eradicating financial autonomy.”

“A retail CBDC would essentially allow the government to mediate all
transactions, which would mirror what we see in China. It’s vital to
ensure this does not happen here,” Davidson said in a statement.


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