Executive Order 14067Travis what is your take on the Fed Now Service for the Fed Digital Currency? Where can this be bought?Thanks
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FedNow is just a new transfer system being launched by the Fed this year, essentially a way to make money movement between banks faster and cheaper.
The hand-wringing is all about the FedCoin, which may come in the next few years as a central bank digital currency, eventually replacing the current recordkeeping regarding cash with something like a “cryptocurrency dollar”
My take? It’s mostly just fear marketing. People have been using this idea of the Fed creating a (more) digital currency for years to scare folks into buying stuff the Fed doesn’t control. Usually they’re pitching a cryptocurrency of one sort or another as a way to benefit from the fact that people will run from the dollar because they fear the Fed’s control, or disingenuously trying to imply that the Fed is somehow going to “replace” the dollar with an existing cryptocurrency (impossible, of course).
I’m not crazy about the erosion of financial privacy, but it has been gradual for decade and does have some benefits, too (speed and the suppression of money laundering and tax cheats). It’s also possible that a reliable FedNow service or even a FedCoin will cut into the market share of some cryptocurrencies, though I’d guess that it will mostly be a non-issue. If we do end up with a FedCoin in a few years, it will act pretty much the same, from a user perspective, as the current dollar… which is also almost entirely digital .. and it will be completely interchangeable with existing dollars.
The pretty clear trend is that the cheapest and most convenient money transfer system will eventually win out, and maybe the FedCoin/FedNow system will be that, but in most ways it’s just an improvement over existing Fed-managed transfer systems that are antiquated and slow and expensive.