In Response To Criticism, Federal Reserve Asserts That Instant Payment System “FedNow” Will Not Facilitate A CBDC, But The Biden Admin. Says Otherwise

The U.S. Federal Reserve is claiming that their new digital instant transfer payment system FedNow is not designed to facilitate a central banker digital currency (CBDC).

In the wake of the banking tsunami scare and contagion after the collapse of Silicon Valley Bank on March 10th, on the 15th the Federal Reserve quietly announced that their instant payment system is set to launch this July. FedNow will operate at all times and will allow payments and transfers to be accomplished at rapid speeds, interlinked with larger banking institutions. Formal certification for banks interesting in joining this program began on the first of April.

The WinePress detailed its release last month: “Red Alert: Federal Reserve Set To Launch “FedNow” Digital Payment System To Usher In CBDC”

When the Federal Reserve made it’s March announcement some financial experts and analysts immediately said that this would ultimately lead to a new digital dollar and CBDC.

However, the Federal Reserve recently responded to this claim, unequivocally claiming that FedNow will usher in no such thing. On April 7th the Federal Reserve, answering their own question – “Is FedNow replacing cash? Is it a central bank digital currency?,” the Fed said no.”

They wrote:

No. FedNow is not related to a digital currency. FedNow is a payments service the Federal Reserve is making available for banks and credit unions to transfer funds. It is like other Federal Reserve payments services, such as Fedwire and FedACH. The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.

The FedNow Service is an instant payments service provided by the Federal Reserve, launching in July 2023. FedNow will be available to depository institutions, such as banks and credit unions, in the United States and will enable individuals and businesses to send instant payments through their depository institution accounts. Instant payments allow individuals and businesses to send and receive payments within seconds at any time of the day, on any day of the year, so that the receiver of a payment can use the funds almost instantly.  

The Federal Reserve has made no decision on issuing a central bank digital currency (CBDC) and would not do so without clear support from Congress and the executive branch, ideally in the form of a specific authorizing law. A CBDC would not replace cash or other payment options.

The Fed stated

However, this statement conflicts with a previous statement the Fed made concerning FedNow last year. As noted in aforementioned The WinePress report about FedNow, Fed governor Michelle Bowman in a meeting last August, said that this system will essentially act as the launchpad for CBDCs as the Federal Reserve continues to develop theirs as do other central banks.

FedNow will help transform the way payments are made through new services that allow consumers and businesses to make payments conveniently, in real time, on any day, and with immediate availability of funds for receivers. Our assessment of these benefits has not changed even as we consider whether a central bank digital currency (CBDC) might fit into the future U.S. money and payments landscape.

My expectation is that FedNow addresses the issues that some have raised about the need for a CBDC. As I’m sure you are already aware, earlier this year we published a discussion paper that outlined some design principles, costs, and benefits of a CBDC and solicited public comments. We received over 2,000 comments, and we are currently reviewing these comments and plan to publish a summary of them.

She said during the VenCent Fintech Conference, Little Rock, Arkansas, last year

But some economists believe that FedNow is undoubtably designed to usher in a CBDC. Lena Petrova, a certified public accountant (CPA), explains that India has an identical system in place and that Indian officials have acknowledged that their instant transfer system is designed to usher in a CBDC of their own.

The more research you do on this, the more it becomes clear that the two systems go hand-in-hand and serve the same goal.

Petrova explained

Furthermore, even the White House and the Biden administration have acknowledged that both FedNow and a CBDC overseen by the Fed are indeed related, praising both for their speed and ease of accessibility, which has been further necessitated due to the shift in business and finances since 2020, the White House claims.

Released in March, the Biden Administration published an over 500-page document titled “The Economic Report of the President,” which discusses the prospect of FedNow and a CBDC. Chapter 8 deals with cryptos, and in a subsection titled “Investing in the Nation’s Digital Financial Infrastructure,” the White House acknowledges the introduction of FedNow and a CBDC.

Referencing the two, the White House admits that both systems are relatable:

This section first discusses an upcoming improvement to U.S. payments, which will help many consumers and businesses make cheap, instant payments. It then discusses the possibility of introducing a central bank digital currency (CBDC), which is a digital form of money. While operating under the supervision of a trusted authority, both these mechanisms have the potential to realize many of the benefits that crypto asset developers have promised.

The White House goes on to praise FedNow, claiming that it offers an “uninterrupted processing of fund transfers is an important improvement over existing payment systems.” Additionally the Biden administration wrote:

Beyond speed and convenience, near instant payments can yield real economic benefits for both individuals and businesses by allowing them to make time-sensitive payments whenever needed and providing them with more flexibility in managing their money.

In particular, near instant payments under FedNow could bring significant benefits to vulnerable segments of the population. Slow payment systems can cost Americans billions of dollars. In addition to incurring bank overdraft fees, consumers can be forced to use high-cost alternatives like check cashers and payday lenders.

In 2019, it was estimated that a fast payment system such as FedNow could reduce these kinds of fees, generating savings of more than $7 billion a year for American households. Because lower income individuals are more likely to be hurt by slow payment systems, they could especially gain from these savings if FedNow is adopted widely. Using innovation productively and responsibly in this way could make banking services more inclusive.

However, the White House acknowledges that FedNow does indeed open the door for a possible CBDC, also citing Fed Governor Bowman (see above quote).

As for a CBDC, the White House also has good things to say about implementing one:

A U.S. CBDC—a digital form of the U.S. dollar—would have the potential to offer significant benefits. It could enable a payment system that is more efficient, provide a foundation for further technological innovation, facilitate faster cross-border transactions, and be environmentally sustainable.

It could also promote financial inclusion and equity by enabling access for a broad range of consumers. A potential U.S. CBDC could also help support other policy goals. For example, a potential U.S. CBDC could help ensure that such payment systems are aligned with the principles of human rights, democratic values, and privacy.

They do, however, also notate that the introduction of a CBDC would mean that certain “permissions” would be attached to them. In other words, a social credit score perhaps, or term limits and clauses that provide a framework as to how the CBDCs can be spent, used, and saved. CBDCs have expiration dates, for example, so the idea of saving and being frugal with them are canned.

The document explains:

A White House assessment of a potential U.S. CBDC system recently noted that “while a U.S. CBDC system could, in theory, be mostly ‘permissionless’ from a governance standpoint, this design choice introduces a large number of technical complexities and practical limitations that strongly suggest a permissionless approach does not make sense for a system that has at least one trusted entity (i.e., the central bank).”

This is somewhat ironic, given that this is different from an oft-cited founding principle of crypto assets like Bitcoin, whose purported aim was to create decentralized money without any trusted central authority.

In conclusion, while these systems are worked on and fine tuned, “In the meantime, some crypto assets appear to be here to stay, and they continue to cause risks for financial markets, investors, and consumers,” the White House says.

In the end, the Biden administration claims that there is value in both FedNow and/or a CBDC:

Certain innovations, such as FedNow and a potential U.S. CBDC, could help bring the U.S. financial infrastructure into the digital era in a clear and simple way, without the risks or irrational exuberance brought by crypto assets. Hence, continued investments in the Nation’s financial infrastructure have the potential to offer significant benefits to consumers and businesses, but regulators must apply the lessons that civilization has learned, and thus rely on economic principles, in regulating crypto assets

The White House wrote

While the Federal Reserve claims that FedNow has nothing to do with a CBDC, it is no secret that they are working on one.

The Federal Reserve has already engaged in the creation of their own CBDC with major U.S. banks and credit card companies, reported by The WP last year.

Moreover, months prior to that, the Fed announced that they would be working on a carbon-based social credit score investing platform with some of the largest banks in the country.

SEE: BRICS Nations Discussing Working On A ‘Fundamentally New Currency’ According To Russian Official

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AUTHOR COMMENTARY

The rich man is wise in his own conceit; but the poor that hath understanding searcheth him out.

Proverbs 28:11

Clearly the Federal Reserve is lying, especially when you have the White House admitting that the two are related. The system is so obviously designed to facilitate a CBDC. Don’t ever take the Fed or rich bankster gangsters serious: they never tell the whole truth; though the government does not either, but you get my point.

The White House, if you read the rest of the section on cryptos, are basically admitting that the proliferation of these decentralized currencies were designed to grease the wheels of the masses, to get them used to the idea of a digital currency – one that the central bank would eventually oversee and regulate.

The introduction of a CBDC is inevitable, but it will not happen overnight: it will progressively be fostered in after FedNow is launched, and once the financial markets and the everything bubble is allowed to pop, and the people are begging for bread, then the talks of a CBDC will become loud. And the people will accept it, sad to say.

SEE: World Economic Forum Openly Says Those Who Submitted To The Covid Lockdowns Will Also Accept Social Credit Scores And Carbon Calculators

Ways To Resist And Slowdown The Introduction Of Central Bank Digital Currencies

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[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).

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