> “The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.”
What people are accusing them of is taking steps toward creating a digital dollar. This is their response, which is pretty mealy-mouthed if it's meant to address those accusations. A better way to express a denial would be "the Federal Reserve has no intention of creating a digital dollar and is not planning for nor working on that project," if indeed that is true.
Because if they DO create one in the near future, then this product SHOULD be designed as a step toward that. If they create a digital dollar and it uses any version of FedNow, then they're liars. If they create a digital dollar and it uses an entirely different product, they're incompetent.
I actually don't have a strong opinion about the digital dollar. I learned about it as a concrete idea in this very article. My opinion is: sounds reasonable, probably pretty complicated to pull off. I am opinionated when it comes to bad, weasely non-answers to questions though, if that's what you mean.
If they create a digital dollar and it uses any version of FedNow, then they're liars. If they create a digital dollar and it uses an entirely different product, they're incompetent.
The characterization of the Federal Reserve as incompetent is the strong opinion I observed. I personally don't agree with the logic you communicated. I think a completely separate CBDC project that is separate from FedNow is perfectly appropriate.
IMO, many policy makers view FedNow as a better ACH.
Whereas, CBDC is a much more controversial project for some policymakers.
Separating the two projects offers some risk mitigation and ensures we will at least have something usable (1) in the short to medium term and (2) even if CBDC is mired in political non-consensus.
That's a reasonable response. I was being hyperbolic I suppose. What I meant was: if they are working on FedNow and a digital dollar at the same time, a more efficient use of resources would be to plan for FedNow to be interopable with the digital dollar, so that they don't have to replace it with something that is in a few years.
Perhaps they are planning for that already. My main complaint is the lack of both transparency and clarity in the quoted statement. I don't believe their response will satisfy anybody who is wondering if the Fed is working on a digital dollar, when it would have been very easy for them to do that. I sort of expect that kind of needle-threading response from private companies and individuals, but (naively) expect more transparency from public institutions.
Consider "We have every intent of creating a digital dollar and are actively planning and working on that project BUT FedNow has NOTHING to do with that project".
What people are accusing them of is taking steps toward creating a digital dollar. This is their response, which is pretty mealy-mouthed if it's meant to address those accusations. A better way to express a denial would be "the Federal Reserve has no intention of creating a digital dollar and is not planning for nor working on that project," if indeed that is true.
Because if they DO create one in the near future, then this product SHOULD be designed as a step toward that. If they create a digital dollar and it uses any version of FedNow, then they're liars. If they create a digital dollar and it uses an entirely different product, they're incompetent.