Remember the children’s song, “Them Bones, Them Bones, Them Dry Bones”? It goes, “The ankle bone’s connected to the leg bone, the leg bone’s connected to the knee bone.” I always messed that song up. I just knew when the song was over, all the bones were connected! What recently happened with the Federal Reserve reminds me of that song.
On June 29th, the U.S. Federal Reserve announced that 57 firms have been certified to utilize its new instant payments system called “FedNow.” The Federal Reserve said 41 banks and 15 service providers would be “early adopters” after its late July launch. The Federal Reserve officially launched this “wonderful” new product, and FedNow is now live at 35 banks. Major banks, such as JPMorgan Chase and Wells Fargo, are two of the early adopters, as is the U.S. Treasury.
What is FedNow?
FedNow is a new service that will immediately allow the transfer of funds. Everything will be run through the Federal Reserve so that each transaction will happen fast. Since this is the public’s first interaction with using the Fed directly, it will take some adjusting. So, if the Fed gives the public a little taste after they get a little taste, they’ll be all in and wanting more. Then, they can start incorporating the complete plan. That’s what this is all about.
The Federal Reserve claims this is the alternative to a CBDC — a Central Bank Digital Currency. But really, what this is is a stepping stone to a CBDC. Once the public gets more comfortable with the speed of FedNow and the system is accepted as the standard procedure, you’ll get a Central Bank Digital Currency.