{"id":19647,"date":"2023-04-09T14:22:43","date_gmt":"2023-04-09T14:22:43","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/not-related-to-a-digital-currency-us-central-bank-addresses-concerns-over-fednow-payment-network-bitcoin-news\/"},"modified":"2023-04-09T14:22:43","modified_gmt":"2023-04-09T14:22:43","slug":"not-related-to-a-digital-currency-us-central-bank-addresses-concerns-over-fednow-payment-network-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/not-related-to-a-digital-currency-us-central-bank-addresses-concerns-over-fednow-payment-network-bitcoin-news\/","title":{"rendered":"‘Not Related to a Digital Currency’ \u2014 US Central Bank Addresses Concerns Over Fednow Payment Network \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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The U.S. Central Bank has issued an update regarding the Federal Reserve\u2019s Fednow project, which is scheduled to commence in July. The Fed has responded to recent criticism of the Fednow service and asserts that the Fednow payment network is \u201cneither a form of currency nor a step toward eliminating any form of payment, including cash.\u201d<\/strong><\/p>\n

Fednow Won\u2019t Replace Cash, the U.S. Central Bank Insists<\/h2>\n

When the U.S. Federal Reserve announced the launch of the Fednow service in July, it sparked immediate opposition and led many to believe it is one of the initial stages of an American central bank digital currency (CBDC). Several prominent economists and politicians have cautioned that a CBDC would bring about greater surveillance of Americans\u2019 financial transactions.<\/p>\n

In order to quell fears, the Fed issued an update<\/a> on April 7, 2023, in which it raised the questions, \u201cIs Fednow replacing cash?\u201d and \u201cIs it a central bank digital currency?\u201d The central bank maintains that Fednow accomplishes neither of these objectives and emphasizes that the project is solely focused on \u201cinstant payments.\u201d The Fed\u2019s update unequivocally states: \u201cFednow is not related to a digital currency.\u201d The U.S. central bank\u2019s notice adds:<\/p>\n

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Fednow is a payments service the Federal Reserve is making available for banks and credit unions to transfer funds. It is like other Federal Reserve payment services, such as Fedwire and [Fed ACH]. The Fednow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.<\/p>\n<\/blockquote>\n

In a recent interview, economist Richard Werner expressed concern<\/a> about the timing of the Fednow project, describing it as \u201csuspicious.\u201d Werner linked the initiative to a central bank digital currency (CBDC), a sentiment shared by Georgia Representative Marjorie Taylor Greene, who criticized<\/a> Fednow on April 5. In recent times, several U.S. lawmakers have proposed legislation<\/a> that would prohibit CBDC initiatives.<\/p>\n

According to the Fed\u2019s update, the central bank \u201chas not made a decision on whether to issue a central bank digital currency (CBDC),\u201d and it will not do so without the authorization of the executive branch and congressional members. The Fed further emphasizes that \u201ca CBDC would not replace cash or other payment options.\u201d<\/p>\n

Conversely, the White House\u2019s recent \u201cEconomic Report of the President\u201d noted<\/a> the possibility that Fednow and CBDC initiatives \u201chave the potential to realize many of the benefits that crypto asset developers have promised.\u201d With regards to a U.S. CBDC, the general public is currently aware of two distinct Federal Reserve projects.<\/p>\n

The first project is an experiment called \u201cProject Cedar<\/a>,\u201d a pilot designed by the Federal Reserve Bank of New York. The Project Cedar protocol employs a wholesale digital dollar to enhance financial transactions. The second CBDC initiative by the Fed is \u201cProject Hamilton<\/a>,\u201d a joint effort of the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT). While the Fed maintains that Fednow is not related to a digital currency, it seems to be a matter of semantics.<\/p>\n

The Fed asserts that the Fednow service is not a digital currency or a step toward eliminating any form of payment, including cash, but instead, a digital payment system designed to facilitate instant payments. However, some critics contend that the system is, in fact, a form of digital currency, and that the Fed\u2019s characterization of the project is misleading. Ultimately, the exact nature of the Fednow service and its relationship to a potential CBDC remains a topic of debate.<\/p>\n

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Americans<\/a>, Banking<\/a>, Benefits<\/a>, Cash<\/a>, CBDC<\/a>, Central Bank<\/a>, characterization<\/a>, Criticism<\/a>, crypto assets<\/a>, Currency<\/a>, Digital Currency<\/a>, economists<\/a>, Economy<\/a>, Federal Reserve<\/a>, federal reserve bank of boston<\/a>, Federal Reserve Bank of New York<\/a>, Fednow<\/a>, Financial Services<\/a>, financial transactions<\/a>, instant payments<\/a>, Massachusetts Institute of Technology<\/a>, misleading<\/a>, opposition<\/a>, Payment network<\/a>, payment system<\/a>, politicians<\/a>, project<\/a>, semantics<\/a>, semantics debate<\/a>, surveillance<\/a>, technology<\/a><\/div>\n<\/div>\n

Will the Fednow project pave the way for a central bank digital currency, or is it simply a digital payment system designed to facilitate instant payments? Share your thoughts in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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