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Presidential hopefuls RFK Jr. and DeSantis rally against FedNow

The two presidential hopefuls are of the opinion that FedNow is the first step in launching a CBDC that threatens privacy and autonomy.

Presidential hopefuls Robert F. Kennedy Jr. (RFK Jr.) and Ron DeSantis are rallying against the Federal Reserve’s FedNow payments system claiming it would pave the way for a Central Bank Digital Currency (CBDC).

In an April 11 Twitter thread, Democrat RFK Jr. — the nephew of former president John F. Kennedy Jr. — once again sounded the alarm bells over CBDCs describing them as the “ultimate mechanisms for social surveillance and control” as he questioned the Fed’s claims that FedNow won’t be used to facilitate a CBDC:

“The claim that FedNow is not the first step toward a CBDC would be more easily digestible were we not aware of the Biden administration’s steady barrage of hostile broadsides against cryptocurrencies.”

He added that cryptocurrencies like Bitcoin (BTC) "give the public an escape route from the splatter zone when this bubble invariably bursts" and claimed that Joe Biden's administration was "colluding with the banksters to keep us all trapped in the bubble of profiteering and control.”

RFK Jr. filed his candidacy documents on April 5 and has been highly critical of CBCDs, stating last week that they “grease the slippery slope to financial slavery and political tyranny.”

FedNow is a 24/7 instant payments system that is slated to launch in July with the aim of speeding up transfers between financial institutions and businesses while also providing a government-backed alternative to similar networks provided by the private sector.

The Fed played down talk of the system potentially being integrated with a CBDC. On April 8 it addressed a series of frequently asked questions saying that “no decision” has been made to issue a CBDC and it “would not do so without clear support from Congress and the executive branch, ideally in the form of a specific authorizing law.”

In an April 11 tweet responding to the Fed's statement, Florida’s Republican Governor DeSantis stated that it is “not merely ‘ideal’ that major changes in policy receive specific authorization from Congress; it is constitutionally required."

“Unaccountable institutions cannot impose a CBDC on Americans," DeSantis said. "They will tell us that [a] CBDC won’t be abused but we are wise enough to know better. This wolf comes as a wolf,” he added.

DeSantis is reportedly eyeing a presidential run himself and has also been pushing back against CBDCs. On March 20, he called for a ban on CBDCs in Florida citing concerns over their potential use for surveillance and control over citizens.

However, some remain unconvinced of these statements.

Related: CBDCs ‘threaten Americans’ core freedoms’ — Cato Institute

Speaking with NBC News on April 7, Aaron Klein, a former United States Treasury official and chief economist at the Senate Banking Committee, argued that the privacy-related concerns held by JFK Jr. and DeSantis are misplaced.

Klein noted that financial institutions are already required to report transaction data under current anti-money laundering and terrorism financing laws, and as such, a CBDC wouldn’t encroach on privacy any further.

“What [DeSantis] is getting wrong is this idea that there’s more reporting if there’s a central bank digital currency than if it’s a commercial bank digital currency,” he said.

Klein also spoke to AFP Fact Check on April 11 and emphasized that FedNow is purely focused on speeding up current Fed payment rails.

"There is no difference in privacy or surveillance whether you are using your Visa card or a CBDC," Klein said, adding that FedNow and CBDCs have “nothing to do with the other."

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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‘Not Related to a Digital Currency’ — US Central Bank Addresses Concerns Over Fednow Payment Network

‘Not Related to a Digital Currency’ — US Central Bank Addresses Concerns Over Fednow Payment NetworkThe U.S. Central Bank has issued an update regarding the Federal Reserve’s Fednow project, which is scheduled to commence in July. The Fed has responded to recent criticism of the Fednow service and asserts that the Fednow payment network is “neither a form of currency nor a step toward eliminating any form of payment, including […]

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Robert Kennedy Jr: Government Could Ban, Seize Bitcoin — CBDCs Could Lead to Financial Slavery, Political Tyranny

Robert Kennedy Jr: Government Could Ban, Seize Bitcoin — CBDCs Could Lead to Financial Slavery, Political TyrannyPresidential hopeful Robert F. Kennedy Jr. has issued a warning regarding the Federal Reserve’s new Fednow system and the potential risks of central bank digital currencies leading to financial slavery and political tyranny. He additionally warned: “We should not be blind to the obvious danger that this is the first step in banning and seizing […]

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Georgia Rep. Marjorie Taylor Greene Criticizes Fednow Project, Pushes for Return to Gold Standard

Georgia Rep. Marjorie Taylor Greene Criticizes Fednow Project, Pushes for Return to Gold StandardOn Wednesday, Marjorie Taylor Greene (MTG), a Republican member of the U.S. House of Representatives, shared an article about the Federal Reserve’s Fednow project and criticized the central bank’s digital currency efforts. The representative from Georgia insisted that the U.S. should return to the “gold standard” and said she’s taking a “hard pass” on digital […]

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US Central Bank’s Fednow Payment Service to Launch in July, Economist Calls Timing ‘Suspicious’

US Central Bank’s Fednow Payment Service to Launch in July, Economist Calls Timing ‘Suspicious’According to the U.S. Federal Reserve, the central bank’s Fednow payment service will start operating in July, and participants will be certified in April to leverage the Fednow Pilot Program. Ken Montgomery, the Fednow program executive, is urging American financial institutions to make preparations to join the central bank’s new payment service. Economist Richard Werner, […]

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‘Crypto FUD’ — Industry outraged as White House report slams crypto

The report included 35 pages seemingly aimed at debunking the merits of crypto assets.

Crypto executives have expressed irritation over the latest White House economic report — which notably features an entire chapter dedicated to casting doubts on the merit of digital assets.

The Economic Report of the President, released March 20, marks the first time the White House has included a section on digital assets since it first began issuing the annual economic policy report in 1950.

Co-founder of digital asset investment firm Paradigm, Fred Ehrsam, remarked that 15% of the Economic Report was dedicated to “crypto FUD.”

The report includes 35 pages dedicated to debunking the “Perceived Appeal of Crypto Assets” along with a short section on the FedNow payment system and central bank digital currencies (CBDCs).

The report’s main argument is that crypto assets fail to deliver on their “touted” benefits, such as improving payment systems, financial inclusion, and creating mechanisms to transfer value and intellectual property, stating:

“Instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices—and many of them have no fundamental value.”

It also argues that cryptocurrencies fail to perform the functions of sovereign money — such as the U.S. dollar — as crypto prices fluctuate too wildly to be a stable store of value, nor can they function as a unit of account or medium of exchange.

Excerpt from Chapter 8: Digital Assets: Relearning Economic Principles Source: Economic Report of the President

The report also takes aim at stablecoins, which it argues are subject to run risks, and is thus too risky to satisfy their role as a “fast payment” instrument.

Blockchain Association CEO Kristin Smith called the latest presidential report “disappointing,” saying it shows that some in the government appear “increasingly allergic” to the burgeoning crypto industry, adding:

“We urge the Biden administration to consider how it will be remembered: as a leader of profound innovation or a roadblock to a global tech revolution.”

Decentralization is also highlighted in the report, which argues that “despite claims of being decentralized and trustless, blockchain-based applications are in practice neither.”

Users access crypto assets by going to a limited set of crypto asset platforms, while a small group of miners performs the majority of mining in most crypto assets, it argues.

Related: House Republicans directly criticize Biden administration for digital asset policies

The latest annual economic policy report was published some two weeks after the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank — all three of which served aspects of the crypto industry. 

Dan Reecer, chief growth officer at decentralized finance (DeFi) platform Acala Network, claims the report comes “just days” after Operation Chokepoint 2.0 was executed on crypto-friendly banks.

Source: Twitter

He also noted an “obvious early warning” of an upcoming United States CBDC, or digital dollar, referencing a section of the report that seemingly touts the benefits of a U.S. central bank-controlled currency. 

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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Federal Reserve confirms July launch for FedNow instant payment service

The FedNow service aims to reduce the gap in payment time between United States financial institutions.

The United States Federal Reserve has confirmed a July launch date for its long-awaited instant payments system, seen by some as an alternative to central bank digital currencies and stablecoins.

The instant payment network will settle payments in seconds and can support transactions between consumers, merchants and banks. It does not rely on blockchain technology.

It’s a significant step for the government, as it is controlled by the Federal Reserve. Clearing House’s RTP network, which also offers real-time payments, is operated by a consortium of large banks. 

According to a March 15 announcement, the U.S. Fed said the debut of FedNow is set for July, with the U.S. Treasury and a “diverse mix of financial institutions of all sizes” ready to use the network from launch.

The Fed said it will “begin the formal certification of participants” during the first week of April in preparation for the launch.

“Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system,” the announcement reads.

FedNow was announced in 2019 and will provide round-the-clock, real-time gross settlement by funneling commercial bank money from a sender through a Fed credit account to its recipient. It also has built in features such as fraud risk management.

Following the official launch, the Federal Reserve outlined that it will push to onboard as many as financial institutions as possible in order to increase the availability of instant payments.

“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 FedNow Program executive sponsor, said in the announcement.

Some see the FedNow service as tackling a problem that both stablecoins and CBDCs also seek to solve.

The FedNow program, however, doesn’t use blockchain tech, while the Federal Reserve is known to have a cautious and skeptical view on stablecoins. 

Tweet from Meltem Demirors on FedNow. Source: Twitter

One of the major banking payment rails servicing U.S. crypto companies in the Silvergate Exchange Network (SEN) was shut down earlier this month following Silvergate’s collapse.

As it stands, SEN competitor SigNet from Signature Bank is still operational despite the bank’s forced closure on March 13. However, its fate is up in the air, while a number of companies have reportedly fled from the network following Signature’s troubles.

FedNow could also stand in place of a central-bank-issued digital currency.

Federal Reserve Vice Chair Lael Brainard emphasized during a House of Representatives Committee on Financial Services hearing in May that a CBDC would take far longer to get off the ground than FedNow due to regulatory hurdles.

“[If] Congress were to decide… to issue a central bank digital currency, it could take five years to put in place the requisite security features, the design features,” she said.

She added that FedNow will serve many of the same functions as a CBDC anyhow.

Related: Tassat blockchain to join FedNow service with B2B on-ramp as pilot prepares for launch

Fed chair Jerome Powell also spoke before the House Financial Services Committee on March 9 and suggested that a potential U.S. CBDC is still quite some time away.

“We’re not at the stage of making any real decisions,” he said, adding that “what we’re doing is experimenting in kind of early stage experimentation. How would this work? Does it work? What’s the best technology? What’s the most efficient?”

Commenting on FedNow, however, he stated that “we’ll have real-time payments in this country very, very soon.”

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