The forthcoming FedNow digital payments system raises privacy and government surveillance concerns.
Bitcoin’s prospective function in a world where central banks seek to control financial transactions via CBDCs or alternatives such as the United States FedNow payment system.
In July, the Federal Reserve will launch its digital payments system, FedNow. Tom Barkin, president of the Richmond Federal Reserve, characterized the system as “resilient, adaptive, and accessible,” and it seeks to facilitate quicker, less expensive bill payments, money transfers, and other consumer activities.
However, as central banks around the world pursue Central Bank Digital Currencies (CBDCs), concerns emerge regarding the potential ramifications for financial liberty and privacy.
The introduction of a CBDC by FedNow could pave the way for heightened government oversight of private financial matters.
In the absence of transactional anonymity, according to Robert Francis Kennedy Jr., central banks would be able to enforce dollar limits on transactions and restrict when and where money can be spent. A CBDC that is connected to digital identity and social credit scores could be even more dangerous.
Kennedy argues that such a system would permit governments to sequester assets. Even those who do not comply with specific mandates, such as vaccine requirements, could restrict expenditure to approved vendors.
Even though CBDCs were initially restricted to interbank transactions, their introduction raises concerns. These pertain to the possibility that governments will ban or confiscate decentralized currencies such as Bitcoin, as they did with gold in 1933.
Governments appear eager to profit from crises such as banking instability. As a result, they are promoting CBDCs as secure alternatives to paper currencies and a means of bank-run protection.
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