Federal Trade Commissioner Rohit Chopra, who is tasked with reining in the sprawling reach of the tech industry, says the time is now for the Federal Reserve to take action by revamping critical infrastructure before it gets hijacked. According to Chopra, the US is falling behind in the race to revamp payments — a race that is pitting a “megabank monopoly” against governments and central banks.
Up against tech giants, followed by a slew of fintech firms in Silicon Valley, the Fed is facing strong challengers trying to loosen its grip over the dollar, payment rails and how money flows.
The Fed was put on notice by an inconvenient messenger: Facebook CEO Mark Zuckerberg. Appearing before the Senate last month for a hearing on his digital asset project Libra, the tech billionaire informed lawmakers that just because the dollar is the world’s reserve currency today doesn’t mean the dollar can maintain its edge tomorrow.
According to Zuckerberg,
“China is moving quickly to launch a similar idea in the coming months. We can’t sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate.”
In an open letter to the Federal Reserve, Chopra is weighing in on the urgency, prompting the Federal Reserve to develop its proposed FedNow Service, a new, round-the-clock, real-time payments system.
“It is the duty of the Board of Governors to prudently oversee and promote the flow our currency. The Federal Reserve must play a role as a public competitor to prevent a megabank monopoly over a core function of our financial system. As large private firms on Wall Street and Silicon Valley seek to leverage their market power through control of critical infrastructure,