Ron Paul, the muckraking former congressman from Texas, is stirring things up once again, this time taking aim at the new real-time digital payment system proposed last week by the U.S. Federal Reserve. Presented as an innovative solution by government and media voices, the cryptosphere received the news of the Fednow program with little more than a disinterested shrug. Paul is not impressed either, maintaining that the implementation will crowd out competing protocols like Bitcoin, placing even more power in the hands of an already dangerously incompetent federal government.
Paul: Fednow Is Unnecessary
In a press release issued August 5th, the U.S. Federal Reserve announced it will develop “a new round-the-clock real-time payment and settlement service, called the FedNow Service, to support faster payments in the United States.” While the Fed already works with the private sector to provide such services via the Fedwire system, Fednow would be available 24-7, 365 days a year. While Fed representatives and some mainstream media outlets are making much ado over the announcement, with CNBC citing instant check clearance and cost reduction as a nice bonus, Ron Paul sees things a little differently.
The former congressman and medical doctor released a statement to campaignforliberty.org yesterday, saying: “Consumers already have numerous options to make real-time payments, so the Federal Reserve’s decision to begin work on a central bank-run and controlled real payments system — what Competitive Enterprise Institute Senior Fellow John Berlau calls “FedNow” — is baffling.”
A Federal Reserve-run real payments system will crowd out private alternatives, leaving consumers with one government-run option for real-time payments. This will be bad for consumers and real-time entrepreneurs but good for power-hungry Federal Reserve bureaucrats who will no doubt use FedNow to help “protect” the Federal Reserve’s fiat currency system from competition from crypto currencies.