Make new with old – Does with the new grave banking crisis caused by his violent rise in its key ratesthere Federal Reserve (the Fed) feels the tide is turning against it? In any case, the American central bankers announce that they want to launch a instant digital payments from next summer: “FedNow”.
Fast, low-cost crypto transactions worry the Fed
The majority of central bankers across the planet don’t really like Bitcoin (BTC), as it impedes and competes with their valuable central bank digital currency (MNBC) respectively.
While waiting for a digital dollar under its control, the Federal Reserve of the United States is wasting no time in reacting to the growing threat of cryptocurrency adoption. It has thus already announced a first step in fluidization digital transactions. Via a press release published on March 15, 2023, the central bank presents its future service FedNow.
“(…) the FedNow service aims to facilitate access to instant payment services nationwide by financial institutions (…) 24 hours a day, every day of the year. Through financial institutions participating in the FedNow service, businesses and individuals will be able to send and receive instant payments any time of the day, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make urgent payments. »
Excerpt from the Federal Reserve’s press release on its FedNow service
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FedNow: instant payments, but always under the full control of bankers
From the “first week of April”the FedNow service will enter a phase of formal certification of participants, for the launch service from the month of July 2023. At that date, however, only the US Treasury and the financial institutions selected will be able to benefit from the new instant transactions service.
Some observers, especially of course on the cryptosphere side, however, point out that the same defects inherent in fiat currencies are to be expected. The fact that these banking transactions are fast and can (Finally !) be performed 24 hours a day, 365 days a year will in no way remove the problems of centralization and of intermediary role following (non-exhaustive list):
- Unlimited money supply : central banks can run the printing press at will, creatinginflation (in other words: the depreciation of their currency fiat);
- Monetary Policy opaque And centralized in very few hands. THE Jerome Powell’s rate hike threats (Chairman of the Fed) on Tuesday March 7, are probably (on their own) for a lot in the explosion in flight of the Silicon Valley bank (SVB);
- Risk of seizure or arbitrary censorship transactions and accounts, such as for Freedom Convoy protesters in Canada in early 2022;
- Privacy at riskby the possibility of trace all these banking transactions.
The FedNow service, a kind of prototype of a future MNBC, will demonstrate that problematic imperfections in the system fiat (based on the only trust in issuing banks and States) will persist. Because all intermediate between the sender and receiver of a transaction creates additional risk, especially if, as in this case, it can turn off the transaction tap altogether.
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