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Currently this works between banks only. Banks have reserves at the Fed, and those reserves are what gets adjusted when a FedNow transaction happens. The banks
by uses 3y ago
Currently this works between banks only. Banks have reserves at the Fed, and those reserves are what gets adjusted when a FedNow transaction happens. The banks then adjust their own records on their customers' behalf.
- gumby 3y agoThe fed lists a number of service providers on their page. I assume they will now roll out some interfaces. Glad to see the US banking system start to catch up with the rest of the world ca mid 90s.
- foobarian 3y agoSo it's like a Bitcoin exchange, but with dollars!
- deleted 3y ago[deleted]
- tarmon 3y agoI don't see how this is anything like a crypto exchange, is there something I'm missing here?
- RC_ITR 3y agoSome crypto maximalists ignore many of the intrinsic aspects of crypto (decentralized consensus, cryptography, etc.) because in their use case, it's just 'digital money.' So when a completely dissimilar example of 'digital money' comes up, they equate it to crypto, even though it lacks many of the intrinsic aspects of crypto.
- tourmalinetaco 3y agoNone of the intrinsic aspects of crypto matter if its in a centralized exchange. In the cases of a centralized exchange BTC may as well equal fiat, for it has all of the downsides of fiat alongside the risk of an exit scam/mass theft, and with none of the insurances one may have with a fiat institution. So, unfortunately, for these “crypto” maximalists, the crypto aspect of their digital currency is just some fun trivia and not something they even bother to leverage.
- AmericanChopper 3y agoSome would say suspiciously so. Which is why some commentators think this is being implemented as a prerequisite of a CBDC.
- treyd 3y agoThe FedNow project was in the works long before any serious CBDC idea was conceptualized.
- AmericanChopper 3y agoI work with a couple of organisations that have been advising public institutions on their investigations into CBDCs, and the entire timeline of FedNow development took place after CBDCs had initially been conceptualised. CBDCs became a mainstream concept in 2016 when the Bank of England started discussing them publicly. The Faster Payments Taskforce report (which was the basis of FedNow’s design) came out in 2017, and the Fed announced its plans to start work on FedNow in 2019. Many advanced economies announced plans to start seriously investigating the use of CDBCs in 2021, but they’d all been discussing the concept for years at that point. I don’t know whether the fed’s investigation into CBDCs will result in it adopting one. But FedNow has been designed in such a way that it could easily be modified to support one. You’d just have to implement a version of it where the allowed participants were everybody who’s allowed to have a bank account, rather than only banks.
- treyd 3y ago>But FedNow has been designed in such a way that it could easily be modified to support one. Curious how this would work, it would be a pretty big inversion of asset control to make it work. Saying "just have to" is a very big "just", considering it was aimed at only a few thousand institutions with very tight reporting requirements being the target audience instead of hundreds of millions of nontechnical users that would need something that just werks.
- AmericanChopper 3y ago
- landemva 3y agoIt's like a centralized exchange in which funds can be seized, censored, and the participating brokers are licensed. Nothing like bitcoin.
- astrange 3y agoIt's also not like bitcoin because the exchange doesn't own dollars deposited at them and isn't run by a guy living in Dubai who's going to steal all of it.
- yieldcrv 3y agothis is an odd consensus because you just described how all bitcoin exchanges in the US operate. they are centralized in which funds can be seized, censored, and they all have money services licenses just like their corresponding banks do. right, not like bitcoin, like bitcoin exchanges, just like the person said and you somehow ignored. far more similarities than differences for this comment and the other comments at your level to be focusing on the differences and confused about the existence of similarities.
- fastball 3y agoThere are decentralized exchanges which operate in the US.
- pavlov 3y agoHow does a US resident get US dollars out of a decentralized exchange?
- landemva 3y agoGo old school neighborly. Convert it into something your friends or family want, then trade with them for the cash you want. If you don't know anyone that wants to help you reduce your bags of btc or eth, then consider finding a different community.
- deleted 3y ago[deleted]
- melenaboija 3y agoNo, completely opposite. It is like a regular, centralized, and controlled by the government ledger[1] but faster, no more batch files at the end of the day like ACH and that is all. Now is a matter of banks to pay the providers[2] to integrate with their systems and ledgers. [1] https://www.youtube.com/watch?v=le8Me8AfK8k https://www.youtube.com/watch?v=le8Me8AfK8k [2] https://www.frbservices.org/news/press-releases/072023-fednow-live-announcement https://www.frbservices.org/news/press-releases/072023-fedno...
- eweise 3y agoI think most if not all the participating banks are "receive only" so there's no one pushing any money yet.
- erickf1 3y agoIt won't take long before all banks are using it. Once the banks are using it, employers will begin making payments using it. Once employees are receiving digital currency payments from employers, cash will end soon after.
- vel0city 3y agoI've been receiving my payments digitally from employers in the US for almost 20 years now. I've never in my life received a wage in cash, as in, hard dollars.
- landemva 3y agoI received W-2 wages in cash in the military. I suppose I'm old.
- tekknik 3y agoThese days they have you setup an account in basic, and setup direct deposit.
- asah 3y ago...but with days of delay, where someone else is keeping the interest. And maybe charging a transaction fee.
- vel0city 3y ago> ...but with days of delay Maybe a long time ago, but I get my pay which is supposed to be on the 1st and 15th on like the 13th and 29th or something. Getting paid "two days early" is a pretty common feature with Direct Deposit these days. It is always credited to my account before my actual paycheck technically gets posed. > maybe charging a transaction fee I imagine someone would be paying for the transaction of physically handling all the cash, no? Its not like having all the logistics of handling cash to potentially thousands of employees is a zero dollar cost. I imagine its massively cheaper for everyone to pay whatever marginal cost my employer is paying for ACH/DirectDeposit through their payroll app than paying a ton of people to handle and keep track of the cash.