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FedNow Is Live

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Re: FedNow Is Live

#61

Post by Aloha »

delfinom wrote: post #13
EGreg wrote: post #5

Here we go. CBDCs are next, and also national Digital IDs. https://m.youtube.com/watch?v=uwRSzNTp2ko Real ID + needing it to browse anything on the Internet: https://community.qbix.com/t/the-coming-war-on-end-to-end-en... From what I see people on HN writing, by and large they downplay the risks of these as well as AI. Or alternately seem to suggest that CBDCs and national IDs are not coming, and that it’s a conspira…

National IDs in the US are never coming because the evangelical base of the GOP literally oppose it for being the "mark of the beast". >Here we go. CBDCs are next, and also national Digital IDs No, this is a long term replacement for ACH, a function that the Federal Reserve was already carrying out.

I see it as an almost total impracticality to transition from our current system to a centralized national identity document.

There is no central database of:

* Citizenship

* Births

* Drivers Licenses

* Marriages

* Deaths (SSA death reporting is voluntary and customary by funeral homes -not required)

* Education history

* Criminal Records

* Firearm Ownership

* Property Ownership

* Vehicle Ownership

The only thing the feds or even the state government has a certain idea of is, how much you made in a given reporting period - not that reporting periods always overlap in any meaningful way. There is no requirement (as far as I can tell) to even request a social security number - most parents do, because they want to claim their children on their taxes.

Now, many of those records do exist - they exist at the county, state or local level in some manner or fashion - and of course, its not standardized either, sometimes its at the county, sometimes the state, sometimes at the county or state for the same record type based on year. (e.g. Marriages from 1902-1962 are in county records, and 1962 to current in state, or the other way around.)

Trying to link all of this data in a meaningful way, would be a monumental task that would likely require a vast amount of manual data matching - and it would still be wrong 40% of the time.

Re: FedNow Is Live

#62

Post by iudqnolq »

lisper wrote: post #46
iudqnolq wrote: post #20

Earlier quoted context omitted.

> On the other hand, it's going to let the government see every transaction you make Can you go into more detail here on what you think will change from the status quo? Existing bank transfers are obviously not secret from the government on request. While the government doesn't have direct access to run search heuristics on the whole dataset they just delegate that to the banks' internal compliance team.

The magnitude of the change is somewhat in the eye of the beholder. On the one hand, the government already has a lot of visibility into your finances. On the other hand, this removes some friction that currently exists for certain kinds of transactions. This matters more to some people than others. There is also concern that this might be a step towards the eventual elimination of cash.

I find it annoying that we have these endless debates in the US where it's assumed that if there's some magnitude it of course must be more than epsilon.

I would be interested in if anyone can give a example where the friction increases in such a way as a person would experience an actual difference, or how this would actually make cash easier.

Otherwise this sounds to me like the endless silly arguments against a national id card by people. (State ID cards that then go into a federal database are no more private but come with annoying downsides like ID.me)

Re: FedNow Is Live

#63

Post by jsmith45 »

delfinom wrote: post #22
lisper wrote: post #15

Earlier quoted context omitted.

> Is this akin to government-backed Venmo, or something? Yes, exactly. But you have to keep in mind that this is a two-edged sword. On the one hand, it's going to be convenient and probably secure. On the other hand, it's going to let the government see every transaction you make, which for some people will be a very high price to pay.

The government can already see all your ACH transactions like payroll, rent, etc because the Fed Reserve literally runs ACH. This also isn't replacing credit cards or the like, so it is basically an ACH replacement. That's on top of reporting requirements banks already have for your transactions.

The Fed only runs FedACH, which is one of two ACH networks running the same protocol. The other is The Clearing House Payments Company's Electronic Payments Network. Indeed there used to be more private network operators, but the other two eventually folded, leaving just these two remaining.

Re: FedNow Is Live

#64

Post by kemotep »

lockhouse wrote: post #47
kemotep wrote: post #38

Earlier quoted context omitted.

Why would the government program money to expire? Would the money not become effectively worthless the closer to the expiration date? Why would a business accept transactions from people with money that’s about to expire would that then mean they would be giving away goods and services for free potentially?

In theory you spending it would reset the expiration date. If you know your money will expire you will spend it, thus stimulating the economy. We also can’t have the dirty proles save their way to a higher social class.

Where are these theories of how a hypothetical future CBDC come from? Is there an official announcement from the Federal Reserve about how they would like it to work? A committee hearing in Congress where this is discussed?

Re: FedNow Is Live

#65

Post by rvz »

lavp wrote: post #4
lockhouse wrote: post #3

My concern is that this is a trial run for an official CBDC that will eventually replace cash.

What is it about CBDCs you find concerning compared to cash?

When the government does something unpopular against its own people, they can easily quell protestors at scale and force the usage of CBDC adoption by closing ATM withdrawals [0] add savings limits [1] and can incentivise spending with an expiring date. [2]

Whilst many HNers were celebrating UPI as the payment rails from India, it is almost the same thing as FedNow and is planning to put their own CBDC on UPI called E-RUPI [3] taking all the same valid concerns that I have mentioned.

Do you really want this?

[0] https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withd...

[1] https://reclaimthenet.org/digital-euro-spending-saving-limit...

[2] https://bfsi.economictimes.indiatimes.com/news/policy/digita...

[3] https://indianexpress.com/article/explained/what-is-e-rupi-d...

Re: FedNow Is Live

#67

Post by hiatus »

lockhouse wrote: post #3

My concern is that this is a trial run for an official CBDC that will eventually replace cash.

I read remarks where Yellen said explicitly that if FedNow works, they won't need a CBDC. I'll try to dig that up.

Re: FedNow Is Live

#68

Post by lotsofpulp »

Clent wrote: post #60
staringback wrote: post #41

Earlier quoted context omitted.

My Citi Custom Cash card gives me 5% back on gas station purchases (my highest category), even paying the higher price at the pump for credit cards I still come out ahead. I'm fairly certain Citi is not making 5% on interchange fees

Isn't it easier to assume Citi is recovering the 5% via interchange fees versus Citi is losing money every time a customer uses an advertised card feature.

Citi is definitely not earning 5% via interchange fees, this is known. While they might lose some money on the 5% for some credit card users that use it correctly, it is most likely more than made up for by other credit card users who either use the credit card for other types of purchases and receive much less in rewards, resulting in a net gain.

Or citi has figured out that certain users of the card carry a balance and they spend more on interest than it costs in Citi in rewards. If the situation changes and Citi is losing money, then they change the reward amount.

Re: FedNow Is Live

#69

Post by toomuchtodo »

xxpor wrote: post #52
toomuchtodo wrote: post #24

Earlier quoted context omitted.

They could theoretically, but it is unlikely due to each transaction costing a few cents and the monthly FedNow fee being $25 (it is a utility run on a cost recovery basis). No banks charge for Zelle payments to my knowledge, for example. This eventually replaces checks, money orders, Zelle, Venmo, ACH, and probably credit card payment volume over time (as seen with UPI in India and PIX in Brazil). Every deposit acco…

is the fee on a per bank or per account basis?

Per routing number, so effectively per bank.

Edit: (throttled, can’t reply) GSIPs (globally systemic important banks) like JPMC with multiple routing numbers are the exception, not the rule.

Re: FedNow Is Live

#70

Post by oaththrowaway »

kemotep wrote: post #58
oaththrowaway wrote: post #43

Earlier quoted context omitted.

I assume that the TTL of the money would reset once it has changed hands

If you are assuming how a hypothetical future currency will work then we could easily assume exactly the opposite and the money would be destroyed by a set date to maintain some stable rate of deflation. Do you have evidence that a time to live for a currency is being considered by the Federal Reserve and US government?

No, but I have plenty of evidence to suggest that the US government doesn't have our best interests at heart...
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