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Bitcoin Magazine claims Fed accused it of trademark violation for t-shirts

November 3, 2023 Coin Telegraph

CBDC

Crypto publication Bitcoin Magazine claims it has been threatened with legal action over “FedNow” t-shirts, hats, and other items.

The United States Federal Reserve has sent a cease-and-desist letter to crypto media publication Bitcoin Magazine, accusing it of trademark violations, according to a Nov. 3 post from the publication. Bitcoin Magazine claims it is being targeted because of its use of the word “FedNow” on “t-shirts, hats, and other wearables.” FedNow is the trademarked name of the Federal Reserve’s instant payment system.

The U.S. Federal Reserve is threatening to sue Bitcoin Magazine, alleging apparel that parodies its FedNow system is not protected speech, but copyright infringement.@markgoodw_in with Bitcoin Magazine’s response:https://t.co/PYmeZHBYWO
— Bitcoin Magazine (@BitcoinMagazine) November 3, 2023

Bitcoin Magazine carries some merchandise in its store that features the word “FedNow” printed on it, but with the “O” in the word having been replaced with an image of an eye.

*Bitcoin Magazine FedNow T-shirt. Source: Bitcoin Magazine.*

According to the post, the Fed claimed these items “mislead readers into believing a connection exists between the publication and the central bank.”

In response, Bitcoin Magazine’s legal team sent a letter to the Federal Reserve denying the allegation. The merchandise is “undeniably parodic in nature,” the letter stated, as it was created “for the purpose of parody and political criticism directed at the Federal Reserve.”

As evidence for this, the letter pointed to the image of an eye found in the designs, which it referred to as a “surveillance eye.” In a separate open letter referenced in the post, Bitcoin Magazine referred to the eye as an “all-seeing eye that symbolizes the state of total financial surveillance that [the Federal Reserve] is seeking to impose on the American financial system.”

The term “all-seeing eye” or "Eye of Providence" refers to a symbol found in Jacopo Pontormo’s 1525 painting, Supper at Emmaus, and later featured on the back side of a U.S. 1-dollar bill.

*Eye of Providence on the back of a U.S. 1-dollar bill. Source: Wikipedia.*

In its post, Bitcoin Magazine stated that it would not stop printing or selling its “FedNow” line of merchandise, as it believes the items constitute protected free speech under the First Amendment.

FedNow is an interbank payment system launched by the Federal Reserve in July. It allows banks and money transmitter services to make payments instantly, without needing to rely on the automated clearing house (ACH) system used in the past. Bitcoin Magazine has heavily criticized FedNow in its articles and videos, claiming that it is a “scam” that allows the government to “keep controlling you, your business, and everyone else’s.”

FedNow has also been criticized by presidential candidates Ron Desantis and Robert Kennedy, Jr. They claim it's paving the way for a future central bank digital currency (CBDC), which they say will violate the privacy of Americans. The Federal Reserve has denied that its service has anything to do with a CBDC.

FedNow showcases DLT-powered payments system as service provider

August 14, 2023 Coin Telegraph

Coin Telegraph

The Federal Reserve wrote that it does not support or endorse any showcase providers featured on its website.

The United States Federal Reserve’s instant payment system, FedNow, has added a company powered by the distributed ledger technology (DLT) platform Hedera Hashgraph to its list showcasing service providers.

On Aug. 14, FedNow’s official website added Dropp — a micropayments platform built on Hedera — to its FedNow Service Provider Showcase section. The section aims to connect financial institutions and businesses with service providers that can “help them innovate and implement instant payment products using the FedNow Service.“

*DLT-powered platform Dropp showcased on FedNow’s website: Source: FedNow*

According to FedNow’s site, Dropp is a digital solution that was made so that merchants can accept payments at low costs. The company uses DLT and regulated banking tech to build its solution that allows merchants to accept payments without paying huge transaction fees.

While the new update seemed like the Federal Reserve is warming up to DLTs, the FedNow service also wrote on its website that the materials are only “presented as a convenience” to potential FedNow service participants.

“Federal Reserve Financial Services (FRFS) is merely the host for the showcase and does not support or endorse any showcase providers, and the inclusion or exclusion of a provider should in no way imply any recommendation or endorsement by FRFS,” FedNow wrote.

Meanwhile, some crypto community members criticized the new development, saying that people may have given up on the idea of crypto being an alternative to the corruption in financial systems. On Reddit, a community member expressed feeling hopeless as people cheered on the new partnership. According to the Redditor, it’s understandable that people are trying to get a better financial situation, but it should not be at the expense of having a fair and open financial system.

*A community member sharing their thoughts on the new development. Source: Reddit*

Earlier this year, other blockchain networks announced that they would connect to FedNow service but disappeared from the site days after being added. On May 11, Metal Blockchain announced that it would be connecting to the FedNow service. However, the service provider was removed from the site after a few days.

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U.S. Federal Reserve Officially Launches New Instant Payment Service FedNow

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FedNow “early adopter” list contains no blockchains, but some may integrate later

June 30, 2023 Coin Telegraph

CBDC

Two blockchain networks had previously announced integration with the Fed’s instant payment service, but they were not found on a new list of certified providers.

The Federal Reserve’s upcoming instant payment system, FedNow, released its list of certified “early adopters” on June 29. The organizations on the list have been certified as ready to connect with the platform when it launches in late July. No blockchain networks are on the list, despite at least two having previously announced that they would connect to the instant payment system.

The FedNow service stated that some organizations not on the list may be integrated later, and Metal Blockchain said it still intends to connect with the platform once it gains “the appropriate bank sponsor.”

*List of organizations certified with the FedNow Service. Source: Federal Reserve Board Services*

FedNow is an instant payment service in development by the United States Federal Reserve. The Federal Reserve claims that the service will allow for instant transfers between banks in the U.S., similar to the United Kingdom’s Faster Payments and Europe’s Single Euro Payments Area systems.

Currently, bank transfers within the U.S. can only be done through ACH or wire transfers, which are not settled instantly. FedNow is scheduled to launch in July.

At least two blockchain networks have announced that they will be “connecting” to FedNow when it launches. One is Metallicus’ Metal Blockchain. The Metallicus team stated in May that its network will allow instant conversion of cash to stablecoins through a connection with FedNow. At the time, FedNow’s official website also listed Metallicus in its “service provider showcase,” providing further evidence that the integration was going to occur.

*Metal Blockchain’s listing in the FedNow “service provider showcase” on May 11, which was subsequently removed. Source: FedNow website on May 11*

This listing was removed within a few days of the announcement being made. On May 15, Twitter user JeffXRP remarked on the strangeness of its sudden removal.

The list of “service providers” released on June 29 includes ACI Worldwide, ECS Fin, FPS Gold, Open Payment Network and 11 other payment providers, but neither Metallicus nor Metal Blockchain are on it.

In a conversation with Cointelegraph, Metallicus co-founder and CEO Marshall Hayner claimed that the company still intends to integrate Metal Blockchain with FedNow once it obtains the proper bank sponsorship, stating:

“Metallicus is currently in communication with the Federal Reserve and the FedNow program administrators while we seek the appropriate bank sponsor and stay focused on building our bank chain technology.”

The other blockchain network that had announced integration with FedNow was Tassat, creator of the TassatPay service and Digital Interbank Network. Tassat claims its network is a business-to-business private blockchain for commercial banks. In March, it announced that it will connect its digital B2B payment platform to the upcoming FedNow service.

Tassat was listed on the FedNow website’s “service provider showcase” as of June 30.

*TassatPay listing in the FedNow service provider showcase, June 30. Source: FedNow*

However, Tassat is not listed as a certified service provider in the June 30 list of “early adopters.” Cointelegraph reached out to the Tassat team through email but did not receive a response by the time of publication.

In the Federal Reserve’s announcement, it explained that some organizations not on the list may become service providers in the future:

“In addition to the initial adopters, the Federal Reserve continues to work with and onboard financial institutions and service providers planning to join later in 2023 and beyond, as the initial step to growing a robust network aimed at reaching all 10,000 U.S. financial institutions.”

FedNow has been criticized by some blockchain users for allegedly being a step toward a central bank digital currency (CBDC). U.S. presidential candidate Robert F. Kennedy Jr. has claimed that it will lead to “financial slavery.” In April, the Federal Reserve issued a statement denying that FedNow is related to a CBDC.

Privacy should be considered in ‘potential retail CBDC’ — Treasury official

June 14, 2023 Coin Telegraph

CBDC

U.S. Treasury official Graham Steele told an audience at a Texas payments conference that a future CBDC in America should consider anonymity.

Privacy and the ability to transact anonymously should be considerations in the design of a digital dollar, a United States Treasury official has said.

On June 13 the Treasury Department’s Assistant Secretary for Financial Institutions Graham Steele spoke at a payments-focused conference in Texas about the Federal Reserve’s controversial FedNow system and central bank digital currencies (CBDCs).

Steele said one challenge of a retail CBDC is minimizing illegal transactions while maintaining user privacy. He said considerations should still be made about how to protect user anonymity:

“It is important that we consider the extent to which privacy and anonymity might be preserved and explore the technologies and methods available, including Privacy Enhancing Technologies, to enable such protections in the design of any potential retail CBDC.”

In his remarks, Steele weighed the benefits and risks of a possible CBDC saying it could promote a “competitive payment environment.”

On the other hand, a retail CBDC would be directly backed by the Fed and could provide a safer option for consumers during bank runs which could “destabilize private sector lending” according to Steele.

He pointed to the recent banking crisis and said the “access to non-deposit alternatives outside of the banking system may have changed the nature and speed of bank runs.”

He added the U.S. “has not yet determined whether it will pursue a CBDC” but a Treasury-led group is evaluating the implications of a potential CBDC in the country.

Steele said the evaluation includes looking over “policy objectives related to global financial leadership, national security, and privacy, illicit finance and financial inclusion.”

On the Fed’s FedNow instant payments system, Steele thinks having multiple options for payment operations “promotes choice and competition in payments” which he believes will encourage the “development of new payment services and features” along with enhancing payments system resilience.

FedNow has witnessed political pushback. Presidential hopefuls Robert F. Kennedy Jr. and Ron DeSantis are against the system claiming it would pave the way for a CBDC which both claim will hand the government too much control.

In April, Federal Reserve Board governor Michelle Bowman said it was "difficult to imagine" that a CBDC could be justified beyond use in "interbank and wholesale transactions."

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