By Neenah Payne

Growing BRICS Spells Imminent End of US Dollar explains that several nations are applying to join or are considering joining the five BRICS nations (Brazil, Russia, India, China, and South Africa) in a move away from the US Dollar. It pointed out that the Federal Reserve announced a July launch for the FedNow Service and that while FedNow is not a Central Bank Digital Currency, it contains many dangers.

New Instant Digital Payments System Isn’t a CBDC, Feds Say — But Critics Say It’s Still About Control

By Brenda Baletti, Ph.D.

The Federal Reserve pushed back against claims that its FedNow system is equivalent to a CBDC, but critics say the aim is the same: government control over the financial system.

The Federal Reserve wants everyone to know that its new FedNow instant digital payments system, which it plans to roll out in July, is not a central bank digital currency (CBDC).

“The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash,” the U.S. central banking system said in recently updated statement on its website.

Last week, the Cato Institute, Associated Press and Yahoo all followed with articles echoing the Fed’s position — FedNow is “not a central banking digital currency,” with the articles dedicated to “fact-checking” the assertion.

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After reports about FedNow started circulating in November 2022, and after the Fed’s March announcement that the system would launch this summer, bankers, crypto experts and people concerned with personal financial autonomy lashed out, arguing that the system is a step toward a CBDC, or at least toward government control over the financial system.

A CBDC is a government-backed digital currency issued by a central bank — a purely digital form of money, promoted as a tool that could make transactions easy between individuals, companies and the state. But such centrally controlled digital money is also programmable. It could be set to expire at a given time, or restricted to particular kinds of spending — and all transactions would be trackable by the federal government.

The FedNow digital payments system is not a currency, like a CBDC, but it does make instant and trackable digital payments possible.

The Biden administration last March issued an executive order giving the “highest priority” to investigating a CBDC for the U.S. Earlier this year, Fed Chair Jerome Powell told the House Financial Services Committee a decision on  CBDCs hadn’t been made. But, he said, “We’ll have real-time payments in this country very, very soon.”

Some have speculated that FedNow’s ability to make real-time transactions is a way for the Fed to provide key benefits of a CBDC without actually creating one. Fed Board of Governors member Michelle Bowman said so specifically last August: “FedNow addresses the issues that some have raised about the need for a CBDC.”

“The House Financial Services Committee has published a draft bill that would regulate stablecoins. The bill proposes a moratorium on stablecoins backed by other crypto assets until a study is conducted and requests a study on a central bank digital currency (CBDC).”

Former Congresswoman Tulsi Gabbard last week tweeted:

Biden Admin aims to implement a central bank digital currency (CBDC) to bring about a cashless society, allowing them to track everything we purchase & control our money. Gov's “FedNow” system is needed first step to achieve their dream of cashless society. This needs to be… pic.twitter.com/iZp5AGz3vT

— Tulsi Gabbard