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It lowers the cost of the government performing wide surveillance of financial activity; the fear is that lowering this cost will enable more advanced forms of
by EgregiousCube 3y ago
It lowers the cost of the government performing wide surveillance of financial activity; the fear is that lowering this cost will enable more advanced forms of detection and enforcement that ultimately look and feel like harassment.
- culopatin 3y agoWhat makes you think the government can’t look over the current system as easily?
- EgregiousCube 3y agoAs mentioned by a few folks elsewhere in these comments, if FedNow is wildly successful and takes a meaningful portion of payments, it centralizes information about lots of peoples' financial activity in one place, across banks and across payment platforms. This potentially leads to FedNow being a one-stop OLTP shop for governments to run queries against realtime data, or even build stream processing agents that filter or take action on patterns. Currently, it would be more difficult to build this database as it's hodgepodged together from suspicious activity reports and subpoenas. There's of course the unknowable possibility that law enforcement and security agencies have secret ways of building a comprehensive realtime dataset - but, if they do exist, their secret nature reduces the scope of situations in which they can be used.
- culopatin 3y agoHow is that different from ACH?
- EgregiousCube 3y agoACH is slow and coarse, FedNow is capable of being realtime and fine-grained. Two institutions might have one giant ACH per day between them that includes a ton of smaller transactions that are all invisible to the ACH system itself.
- culopatin 3y agoWhat does the timing have to do with visibility though? What government move is quick enough for that to matter? Do you really believe that if “the government” wants to look at money flow they won’t do it until FedNow is live? Each transaction is tracked by an ID accessible by people in the system, not sure why you men by “invisible”.
- EgregiousCube 3y agoAs an example, if you're say, Venmo, your ACH batches won't contain information about the individual p2p money movements of your customers.
- culopatin 3y agoVenmo doesn’t use ACH when moving from Venmo to Venmo. And is the same with FedNow. If you send money from BankA account to bankB account, that’s an ACH transaction and it’s recorded as such. Same with Fed now.
- EgregiousCube 3y agoRight, these concerns are predicated on apps built natively on FedNow gaining market share to rival Venmo enough that these transactions are no longer opaque. If everybody uses it the same way they use ACH, there's no difference to the state of the world today.