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The Federal Reserve Act from 1913 incentivizes banks to join the Federal Reserve payments network. Let me update this to 2020s lingo: The Federal Reserve System

The Federal Reserve Act from 1913 incentivizes banks to join the Federal Reserve payments network. Let me update this to 2020s lingo: The Federal Reserve System is a decentralized autonomous organization (DAO) that pays its stakers 6% annually. It has operated for over 100 years flawlessly. The stakers gain access to a market leading depository and credit system, and have the ability to voice opinions on some variables but the shares itself are non-voting. Like many kinds of entities such as trusts and foundations, there are no owners, only trustees. The human interface to the system is a separate public agency called the Board of Governors, which simply tells the public what the Federal Reserve has done, and also communicates any changes to the Federal Reserve's charter (any legislative updates) to the DAO.

reedjosh 5y ago
The federal reserve is Decentralized? > The Board of Governors' seven members guide the entire Fed system. > The Board and FOMC make the Fed's decisions based on research. https://www.thebalance.com/the-federal-reserve-system-and-its-function-3306001 https://www.thebalance.com/the-federal-reserve-system-and-it...
- vmception 5y ago
  Pick whatever word you prefer for whatever aspect of its multi-part nature you prefer Idgaf
- vmception 5y ago
  Pick whatever word you prefer for whatever aspect of its multi-part nature you prefer Some of the board members come from the member banks
  - reedjosh 5y ago
    It's just that decentralized is not what I'd call a system controlled by 7 people that in turn controls the legally enforced tender of over 300 million people.
    - vmception 5y ago
      Just like all systems that call themselves decentralized, some aspects are and some aspects arent
jude- 5y ago
There's a big difference: the Federal Reserve System lives in the real world, where node misbehavior (i.e. officers doing bad things) is punished with jail time, with ruinous downstream consequences on their families. Wake me up when The DAO hacker is caught and put in jail, and I'll re-consider the analogy.
- vmception 5y ago
  Haha Ill entertain this bit: there are no criminal consequences for misbehaving as a node. Participation of a reserve system shareholder is quite limited and only partially helps assist with routing and regional statistics. Partially. There constraints on being a bank at all are not limited to federal reserve banks.

reedjosh 5y ago

The federal reserve is Decentralized? > The Board of Governors' seven members guide the entire Fed system. > The Board and FOMC make the Fed's decisions based on research. https://www.thebalance.com/the-federal-reserve-system-and-its-function-3306001 https://www.thebalance.com/the-federal-reserve-system-and-it...

vmception 5y ago
Pick whatever word you prefer for whatever aspect of its multi-part nature you prefer Idgaf
vmception 5y ago
Pick whatever word you prefer for whatever aspect of its multi-part nature you prefer Some of the board members come from the member banks
- reedjosh 5y ago
  It's just that decentralized is not what I'd call a system controlled by 7 people that in turn controls the legally enforced tender of over 300 million people.
  - vmception 5y ago
    Just like all systems that call themselves decentralized, some aspects are and some aspects arent

jude- 5y ago

There's a big difference: the Federal Reserve System lives in the real world, where node misbehavior (i.e. officers doing bad things) is punished with jail time, with ruinous downstream consequences on their families. Wake me up when The DAO hacker is caught and put in jail, and I'll re-consider the analogy.

vmception 5y ago
Haha Ill entertain this bit: there are no criminal consequences for misbehaving as a node. Participation of a reserve system shareholder is quite limited and only partially helps assist with routing and regional statistics. Partially. There constraints on being a bank at all are not limited to federal reserve banks.