3 - 5 minute read
Presidential hopefuls Robert F. Kennedy Jr. (RFK Jr.) and Ron DeSantis have spoken out against the Federal Reserve’s FedNow payment system. The two politicians have claimed that it could pave the way for a Central Bank Digital Currency (CBDC) and serve as a dangerous mechanism for social surveillance and control.
RFK Jr. believes that cryptocurrencies like Bitcoin offer the public an escape from the inevitable bursts which could be seen in traditional financial bubbles. He also accused Joe Biden’s administration of colluding with the banksters to control public profiteering from these bubbles. Despite calling CBDCs the “ultimate mechanisms for social surveillance and control,” RFK Jr. filed his candidacy documents and expressed his hostility towards CBDCs, seeing them as leading the world down the road to financial slavery and political tyranny.
FedNow is a 24/7 instant payments service and is set to launch in July 2023. Its primary goal is to speed up financial transactions between businesses and financial institutions while providing a government-backed alternative to private sector networks. The Federal Reserve played down the possibility that the FedNow payment system would be integrated with a CBDC, noting that “no decision” had been made and that a specific authorizing law would be necessary to issue a CBDC.
The claim that FedNow is not the first step toward a CBDC would be more easily digestible were we not aware of the Biden administration’s steady barrage of hostile broadsides against cryptocurrencies.— Robert F. Kennedy Jr (@RobertKennedyJr) April 10, 2023
Between 2008-22, the Fed partnered with a handful of big banks to print $10…
Governor DeSantis, a Republican from Florida, also expressed his views that major policy changes should possess the specific authorization from Congress according to the US Constitution. He further adds that CBDCs imposed by unaccountable institutions would lead the US down a dangerous path of social control and abuse.
Former US Treasury official, Aaron Klein, suggests that concerns over the loss of privacy are unfounded as financial companies are already required to report transactions based on anti-money laundering and terrorism financing laws. According to Klein, a CBDC would not encroach on privacy as a result of current banking regulations.
It is not merely “ideal” that major changes in policy receive specific authorization from Congress; it is constitutionally required.— Ron DeSantis (@GovRonDeSantis) April 10, 2023
Unaccountable institutions cannot impose a CBDC on Americans. They will tell us that CBDC won’t be abused but we are wise enough to know better.… https://t.co/OqJ27Lym2L
The Bottom Line
Despite warnings from Presidential hopefuls, RFK Jr. and DeSantis, the Federal Reserve plans to launch the FedNow payment system in July of this year. While both politicians have expressed concerns over the potential of FedNow to integrate with a CBDC, the Federal Reserve has downplayed this possibility. Traders should keep a close eye on the implementation of FedNow and any further developments in the world of CBDCs which may impact the financial industry.