• The US Central Bank has released an update on the Fednow project, stressing that it is not related to a digital currency or the elimination of cash.
• Critics have raised concerns that the Fednow initiative is part of a larger effort to introduce central bank digital currency (CBDC).
• The Fed has clarified that it is neither issuing nor planning to issue CBDC, and will need executive and congressional authorization before doing so.
U.S Central Bank Addresses Concerns Over Fednow Payment Network
Fednow Won’t Replace Cash, the U.S. Central Bank Insists
When the U.S. Federal Reserve announced its plans for Fednow in July, it sparked immediate opposition and led many to believe it was part of a larger effort to introduce central bank digital currency (CBDC). In response, the U.S. Central Bank issued an update on April 7, 2023 in which they answered two questions: „Is Fednow replacing cash?“ and „Is it a central bank digital currency?“ The answer was an unequivocal no — „Fednow is not related to a digital currency“ — and they added that “it is like other Federal Reserve payment services” such as ACH and Wire Transfer payments.
Economists & Politicians Voice Concerns About CBDC
Prominent economists such as Richard Werner have expressed concern about the timing of Fednow’s launch, linking it to potential surveillance issues if a CBDC were introduced in America. Georgia Representative Marjorie Taylor Greene also criticized the initiative when it was first announced in April 5th . Several lawmakers have proposed legislation prohibiting any future attempts at creating a CBDC in America without authorization from Congress or executive branch members first.
The White House’s Recent Economic Report & CBDC
In contrast to these criticisms, The White House’s recent Economic Report noted that initiatives like FedNow may pave the way for potential CBDC projects down the line if executive or congressional permission were granted first . This report highlights both sides of this debate over whether or not there should be federal regulations preventing any form of central bank digital currency being created within America’s borders without oversight from both branches of government first .
No Decision Has Been Made On Whether To Issue A CBDC
The US Central Bank has made clear with their most recent update that they “have not made a decision on whether to issue a central bank digital currency (CBDC)” , meaning even if legislation does get passed preventing attempts at creating one without proper authorization – actual implementation would still need governmental approval too . This announcement also stresses once again that “a CBDC would not replace cash or other payment options” , but merely offer another form of instant payments alongside existing services provided by banks and credit unions .
In conclusion , despite fears from critics regarding potential surveillance associated with a central bank digital currency – The US Federal Reserve has reiterated through their latest update that creating one isn’t currently part of its agenda , nor do they plan on replacing cash with something else anytime soon either . While certain pieces of legislation are being proposed by lawmakers aiming to prevent any attempts at creating one without prior permission – ultimately governmental permission will be needed regardless before anything can be implemented officially too .