Since cryptocurrency came on the scene, there has been a number of benefits that consumers have been able to enjoy as a result. These include a faster payment system, an alternative store of wealth outside of traditional fiat currency as well as borderless financial freedom. Besides these, cryptocurrency has also benefited the public in that it has brought to light the inefficiencies in the current financial system and as cryptocurrency moves into its next stage of maturity, it seems that regulatory bodies around the world are being forced to confront their own inadequacies and look towards improvement so as to keep up with the times.
Now, in an October 7, 2019 letter, Rohit Chopra, who is a commissioner of the United States federal trade commission has sent a letter to Federal Reserve’s Board of Governors stating that he is in support of a proposed real time financial system dubbed FedNow.
Interestingly enough, the letter also made reference to Facebook as Chopra argues that if the United States government does not act now, they risk having their power undermined by monopolies created by private firms such as Facebook and this likely is in reference to the Libra token. It is believed by many that widespread use of a privately-issued stablecoin could undermine the power of various regions and it has been suggested at several instances that government-issued national tokens are the way forward.
“As large private firms on Wall Street and Silicon Valley seek to leverage their market power through control of critical infrastructure, it is more important than ever for the Board to implement this proposal quickly,” Chopra said.
The service has been in the works for a few years and it was spoken about in a public service announcement by the federal reserve in August 2019 and it will allegedly be a real-time payment platform that will enable both businesses and private individuals to carry out their financial transactions outside of traditional banking hours.
This also stems from concern about what implications Libra will have should it be launched and take root before the FedNow service.
“The laundry list of risks raised by the Libra project will take time to unpack and address. But regardless of Libra’s ultimate fate, the proposal’s emergence underscores the appetite for real-time payments and the urgency of intervention by the Federal Reserve,” Chopra says.