Opinion: FedNow Payment System Acts As US Response To Facebook Cryptocurrency
The Commissioner of the Federal Trade Commission (FTC) Rohit Chopra believes the FedNow payment system could be the answer to the Facebook Libra crypto project. The specialist announced this in an open letter to representatives of the American Federal Reserve.
The vague and scant details on the tech platform’s proposed shadow global central bank have sounded international alarm bells, particularly in light of Facebook’s ongoing scandals and reputation for abuse. The laundry list of risks raised by the Libra project will take time to unpack and address. I share the serious concerns raised by Chairman Jerome Powell13 and Governor Lael Brainard, Rohit Chopra outlined his vision of the stablecoin social network.
At the same time, the specialist believes that at the moment, "when it comes to payment systems, the United States is significantly behind." FedNow, in his opinion, can correct the situation by becoming a response to the threat posed by Libra.
Facebook's Libra project and Wall Street's push for full control are a loud wakeup call. The Fed must act fast to protect our currency from conflicts of interest. This helps every small business making payroll and every family living paycheck to paycheck. https://t.co/70MlGQX8KP
— Rohit Chopra (@chopraftc) November 7, 2019
Recall, Jerome Powell believes that Facebook can use its audience to spread cryptocurrency. The specialist expressed concerns about the possibility of the asset reaching a fast pace of popularization.
Lael Brainard, in turn, sees in Libra a threat to the fiat. The specialist also joined the colleague’s concerns regarding the possibility of the asset’s rapid distribution through the audience of the social network.
Note, against the background of another portion of criticism of the Facebook crypto project, the founder of MGT Capital Investments and US presidential candidate John McAfee also expressed their negative opinion about Libra. The specialist, after reading the white paper of the stablecoin social network, called the asset “garbage.”
— John McAfee (@officialmcafee) November 6, 2019
The situation is aggravated by the fact that Libra, in the opinion of a number of participants in the crypto community, may become an American response to the launch of the cryptocurrency of China. In particular, Facebook CEO Mark Zuckerberg warned the US regulator that if China was the first to release its digital yuan, it would get an audience of 1.7 billion users.
Rohit Chopra noted that regardless of the future fate of Libra, the Federal Reserve should pay attention to the need of people to make payments in real time. Recall, for this purpose, the FedNow project is being developed.
There is currently no information on how the new service will be presented to users. It is known that work on FedNow will continue until 2024. It is noteworthy that earlier lawmakers proposed using the capabilities of blockchain technologies for the service. In particular, the Federal Reserve was asked to consider the option of issuing a digital US dollar.