FedNow - Crypto Killer or Signs of a weakening Fed Res?

[legendster]

In case you guys are not yet informed, the US Federal Reserve is launching its very own real time payments system - The FedNow.

What do you guys think? Is this a crypto killer? Or is it a sign of the weakening federal reserve and perhaps signaling the increasingly failing trust in the traditional monetary system by the common public?

What are the implications of this payment system? Is it a payment processor for a consortium of companies? Or is it another Paypal - but only gov. backed?

The full PR can be found here : https://www.federalreserve.gov/newsevents/pressreleases/other20190805a.htm

While it is scheduled for a 2023 - 24 release, I am sure this payments system could have a decentralized core, but would it be blockchain-based?

Looking forward to interesting reactions to this news.

[gentlemand]

In many parts of the world banking has already worked like this for years - near instant, free, 24/7 - but demand for Bitcoin is getting stronger.

American banking is a stone age joke. If you explained to a European just how shit it is they'd be amazed.

Even if they got up to speed it makes no difference to the underlying issues of the dollar and similar currencies.

[fillippone]

I am copying here a post of mine, I wanted to open a new thread, but I see this might be relevant here:


News form the Fiat ShitCoins:

Fed to develop real-time payments system for launch in 2023 or 2024

The new service, dubbed FedNow, would compete with a private real-time payments system established by a group of large banks in 2017.

In a statement, the U.S. central bank said it was seeking public comment on the project, saying near-instantaneous transfer of funds 24 hours a day could yield economic benefits for individuals and businesses. Randal Quarles, the Fed’s vice chair for supervision, voted against the decision.

This is caused by bitcoin.
Competition pushed every market participant to put all her best effort in improving their product.
a true Hayekian dream: private actors challenge States in the money business, ultimately benefiting citizen.

Today, when I can (potentially) send GB to the other side of the world in a matter of minutes so everyone can appreciate how cute my puppy is,while  I cannot transfer a few kb to move my wealth on the same extent.
I can do only in business hours NY.
I have to pay huge commissions.

GB of data of meme of useless value vs a few kb (a row on a database) worth my life savings.

So, bitcoin put competitive pressure on traditional bank to improve their products.

Conclusion:
If anyone is worried how traditional finance/governments can "kill bitcoin" is not trough laws and prohibitions, but instead they can improve their product (FIAT money) so much that anyone needs to use bitcoin in the first place.

I guess it won't happen.

[dothebeats]

It just amazes me how long does it need to take before the Fed actually improves their system and how many competitions needed to show themselves before they get an idea of how much they are losing day by day. Bank transfers have always been near instant for some banks operating within the same network so I don't think the Fed Reserve is offering something new to the table in here. Perhaps they'd like to include the fancy word 'blockchain' which has been a hit for most companies for the past 2 years or so. Anyway I'm not putting my hopes up for this new payment system that they are trying to get out. People would just get what's already there and what works for them, at least in remittances and moving fund that is.

[fillippone]

It just amazes me how long does it need to take before the Fed actually improves their system and how many competitions needed to show themselves before they get an idea of how much they are losing day by day. Bank transfers have always been near instant for some banks operating within the same network so I don't think the Fed Reserve is offering something new to the table in here. Perhaps they'd like to include the fancy word 'blockchain' which has been a hit for most companies for the past 2 years or so. Anyway I'm not putting my hopes up for this new payment system that they are trying to get out. People would just get what's already there and what works for them, at least in remittances and moving fund that is.

Bank payments are instant from the banks to the clients, but the fund are actually moved trough the FED later on the day.
In a way the banks "trust enough" themselves to actually anticipate funds until FED settles them later on the day (there are now a few settlement windows during the day I think, used to be only one in the evening earlier).

[legendster]

Quite funny that US and UK are both kinda straying away from Cryptos when years ago when this just had the mainstream attention, US & UK were one of the leading places where new development in this sector was happening. Sad how soon times change..

[davinchi]

They could only try their luck on cryptocurrency also, but let them lunch it, they would see the effect of it themselves, it seems that they still don’t understand the system that satoshi has created, it would be difficult for any other payment system to really beat that of cryptocurrency.

Even if they succeed in creating the payment system, would it ever be used globally? Would the payment system run on blockchain technology that would make it a decentralized coin? Why is it now that there is cryptocurrency and now that Libra coin is trying to raise its own payment system that United state too is coming with this, anyway, they are welcome. I am sure they would be disappointed at the level of rejection they would meet when the payment system is being released.

[fillippone]

New update from the cointelegraph:

FedNow — US Federal Reserve Payment Tool a Threat to Banks, Not Crypto

Banks, not cryptos?

Notably, the Fed’s announcement starts with an emphasis on “the rapid evolution of technology,'' which enables the Federal Reserve and the payment industry “to modernize the nation's payment system and establish a safe and efficient foundation for the future.” However, neither the press release nor the enclosed FAQs make a single mention of Bitcoin, cryptocurrencies, Libra, blockchain or even digital currencies at large.

Indeed, it seems that FedNow wants to topple large banking institutions rather than cryptocurrencies. In fact, banking giants Citigroup, Bancorp and JPMorgan Chase have already started fighting the government’s new effort, as it seems to overlap with their own real-time payments system, the Clearing House, which the banks launched in 2017, following a cumulative $1 billion investment injection from those participating.

There's no point for the FED to  posa a "threat to banks" or "topple large banking institutions".
FED is overwatching the whole payments system and must guarantee, as opposed to toppling banks, that banks can stand right and in place (do you remember 2008?)

So this article is fascinating, but it is ultimately non sense.

The FED understood the better way to contrast cryptocurrencies and private money, is not by banning them or by overruling, but making the shitty fiat money a little bit less shitty.
This is a true Hayeckian dream: not State run monopoly over the payments and money, but a competition in the consumer final benefit.

[audaciousbeing]

In case you guys are not yet informed, the US Federal Reserve is launching its very own real time payments system - The FedNow.

What do you guys think? Is this a crypto killer? Or is it a sign of the weakening federal reserve and perhaps signaling the increasingly failing trust in the traditional monetary system by the common public?

What are the implications of this payment system? Is it a payment processor for a consortium of companies? Or is it another Paypal - but only gov. backed?

The full PR can be found here : https://www.federalreserve.gov/newsevents/pressreleases/other20190805a.htm

While it is scheduled for a 2023 - 24 release, I am sure this payments system could have a decentralized core, but would it be blockchain-based?

Looking forward to interesting reactions to this news.

I don't see it as a crypto killer even though that is the end means of project like this because the thinking behind it would be '' the reason why our teeming youth population are goping towards crypto is because they wanted something digital and by the time we create something similar for them, we can be able to still have our control over the situation'' However, this to me might not work as expected because a lot of people that have already been involved with crypto would take it as a substitute because of the control which it wont offer...

[1Referee]

I think the funniest part about this fed payment network is that the XRP army couldn't resist to shill their bags in the way that fed could be partering with Ripple.

Not in a hundred years will the fed use that garbage, where more importantly, you can create your own real time payment network by simply forking and improving existing protocols. I would say that initiatives such as Libra, JPM coin, Fed network, etc only lower the imaginary utility that delusional people think XRP has.

The moral of the story is that centralized protocols will always be replaced by a centralized protocol that's better. The sole reason this space has fundamental value, comes from the fact that we work with distributed ledgers. Everything centralized is utter garbage.

[fillippone]

I think the funniest part about this fed payment network is that the XRP army couldn't resist to shill their bags in the way that fed could be partering with Ripple.

Not in a hundred years will the fed use that garbage, where more importantly, you can create your own real time payment network by simply forking and improving existing protocols. I would say that initiatives such as Libra, JPM coin, Fed network, etc only lower the imaginary utility that delusional people think XRP has.

The moral of the story is that centralized protocols will always be replaced by a decentralized protocol that's better. The sole reason this space has fundamental value, comes from the fact that we work with distributed ledgers. Everything centralized is utter garbage.

There,
think that is what you meant.

[1Referee]

There,
think that is what you meant.

No. I'm legit referring to the fact that centralized entities have nothing unique to offer, and if they do, it's only unique until the next centralized entity delivers a better product. It's a cycle that we already see in the tech world, which directly is why people think Bitcoin will at some point be replaced, but they don't understand Bitcoin's value proposition.

[fillippone]

There,
think that is what you meant.

No. I'm legit referring to the fact that centralized entities have nothing unique to offer, and if they do, it's only unique until the next centralized entity delivers a better product. It's a cycle that we already see in the tech world, which directly is why people think Bitcoin will at some point be replaced, but they don't understand Bitcoin's value proposition.

Ok,
This also makes sense.
You are saying basically bitcoin not blockchain.
Every blockchain project (but Bitcoin) can be done more efficiently by a centralised product, until a new better version come out replacing the old one.
Bitcoin is different because it’s the only one product that has a positive value from being not centralised. This is why we are using a below standard technology (blockchain) to run it.

[legendster]

I think the funniest part about this fed payment network is that the XRP army couldn't resist to shill their bags in the way that fed could be partering with Ripple.

Not in a hundred years will the fed use that garbage, where more importantly, you can create your own real time payment network by simply forking and improving existing protocols. I would say that initiatives such as Libra, JPM coin, Fed network, etc only lower the imaginary utility that delusional people think XRP has.

The moral of the story is that centralized protocols will always be replaced by a centralized protocol that's better. The sole reason this space has fundamental value, comes from the fact that we work with distributed ledgers. Everything centralized is utter garbage.

Just like you, I too think Ripple is garbage. But the fact is, it has sustained itself over the years. Moneygram is a feather in its ugly hat and its headed for more acquisition and partnerships.

Given its centralized structure, it might not be too surprising that Ripple could end up partnering with FedNow.

[Hydrogen]

Do you know how feminists are prone towards slogans such as "keep your politics out of my vagina". I suspect if they were involved in crypto their slogan could be "keep your politics out of my blockchain" instead. 

Institutions like the federal reserve could be too politically polarized to develop a functionally objective system of financial exchange. The theoretical ceiling for designing a payment system could be one completely devoid of politics the way bitcoin's design was created.

That's not to say they don't have advantages. Large entities like the fed could offer accounts that are insured. This could be one advantage they have over other crypto payment systems in terms of hacked accounts and stolen funds being insured up to a certain dollar amount the way bank accounts in the US are insured by the FDIC, etc.

In terms of disadvantages, I vaguely seem to recall it being mentioned the fed profited approximately $40 billion dollars from running the bank bailout and TARP bill back around 2008. Those large profit margins could be a drawback which prevented a fed based blockchain from being competitive with bitcoin and other crypto currencies offering relatively low cost and low rates.

We'll have to wait until more details emerge on the fed's design for this system. Given the relatively unified front which banking cartels present to the world, I think its pretty safe to say the fed won't release a product that makes all other banking systems obsolete. Their strategy could be to rely more on brand name recognition, a lower bar to entry on mass adoption and things like insurance which most crypto products do not offer.

[1Referee]

Just like you, I too think Ripple is garbage. But the fact is, it has sustained itself over the years. Moneygram is a feather in its ugly hat and its headed for more acquisition and partnerships.

Given its centralized structure, it might not be too surprising that Ripple could end up partnering with FedNow.

Knowing how governments don't like to hand over any sort of control, especially not to an entity owning more than half of all the tokens in existence, it's very unlikely.

This is the first time they can build a protocol that doesn't require them to depend on financial institutions they have to beg to freeze your assets and whatnot in case they don't like what you use your money for. They can do it in an instant themselves with their own protocol.

Heck, if there was a single doubt that Ripple would be partnering with the fed, I would buy a ton of XRP myself and wait for the announcement pump. 

[SvonioneFromMangoCoinz]

In my opinion, it is a policy against cryptocurrencies. Recently, Binance has also opened a exchange exclusively for Americans (Binance.US)
Besides, Paypal and Visa and a number of other credit card providers are also creating many services for crypto - fiat transactions.
that's why the Fed needs to set up a FedNow system to strictly manage money.

[lixer]

In my opinion, it is a policy against cryptocurrencies. Recently, Binance has also opened a exchange exclusively for Americans (Binance.US)
Besides, Paypal and Visa and a number of other credit card providers are also creating many services for crypto - fiat transactions.
that's why the Fed needs to set up a FedNow system to strictly manage money.

OH, I SEE, I thought that Binance excluding the US citizens from their platform was to ban them completely, I never knew that they had another agenda, maybe that is the condition given to them by the United State for them to be able to support their operation, and the reason why I believe US did that was to have full control over the US transaction in cryptocurrency.

Coinbase is already not a problem to them because they must have been working with those ones already and getting necessary information from them so that they can use it to tax Americans, now that they have gotten to Binance too, American cannot really escape it except maybe they want to start dealing with DEX exchanges alone. For their payment, I am not sure it will have any effect because it is not crypto.

[el kaka22]

People are not realizing that crypto is not a payment processor. They think bitcoin or crypto is just like a paypal thing where people send each other money. That is not the case at all, bitcoin is literally a currency of its own and can be used to work and get paid in salary and then buy stuff.

I literally bought my vacation from expedia in bitcoin form and haven't paid a single fiat currency for it. That is what bitcoin is. FedNow or Libra or any other stable stuff that is backed by something is just a way of sending dollars to another place with a bit more ease than what we have right now, you are still using dollars, its still fiat money, you are just using a different method of transportation for that dollar and that's it. It has nothing to do with crypto and no its not a crypto killer at all.

[fiulpro]

In case you guys are not yet informed, the US Federal Reserve is launching its very own real time payments system - The FedNow.

What do you guys think? Is this a crypto killer? Or is it a sign of the weakening federal reserve and perhaps signaling the increasingly failing trust in the traditional monetary system by the common public?

What are the implications of this payment system? Is it a payment processor for a consortium of companies? Or is it another Paypal - but only gov. backed?

The full PR can be found here : https://www.federalreserve.gov/newsevents/pressreleases/other20190805a.htm

While it is scheduled for a 2023 - 24 release, I am sure this payments system could have a decentralized core, but would it be blockchain-based?

Looking forward to interesting reactions to this news.

I don't think even if they are going to make it blockchain based , they are going to actually tell us so..
Since we already know how bitcoins is competing with the big agencies and the government itself , therefore it will be like admitting defeat ..since everyone ik associate bitcoins with blockchain.
I think they will just use the existing technology and just go some steps up, other than that I don't know what to expect.