https://www.wfla.com/8-on-your-side/better-call-behnken/zell...

ACH and even check clearing are already largely performed by the Fed today!

Such as what?

>Apply some critical thinking on this. Governments and corporate elites worldwide are salivating over the level of surveillance and control that a CBDC will enable.

How is this any different from the current system? Your cash is 99% digital anyway with basically every transaction completely monitor-able to the Feds under the right circumstances. Don't see how this situation would change much.

I think you should reconsider your stance.

The idea isn't new.

https://en.m.wikipedia.org/wiki/Silvio_Gesell

So easy to undercut the vast network of middlemen involved with using credit cards and debit cards.

[0] https://en.wikipedia.org/wiki/Unified_Payments_Interface

> No. There is no FedNow app. The Federal Reserve does not provide payment services directly to consumers and businesses. Banks and credit unions can provide their customers with access to instant payments through new features

See y'all in another 25 years, when banks get around to implementing this.

It seems to me like a government run shoe factory, or a government run mail service.

Money wasn’t always the sole dominion of government. There is a reason we’ve ended up at this point. I find it to be entirely reasonable.

This isn't true. Private currencies exist(ed) and are afaik still legal.

The reason we put governments in charge of our money is that up until about a decade ago it was either the government or a corporation as a decentralizes currency was not really implementable. Do you want to get paid in amazon coins only redeemable on amazon? No, you do not.

>interest rate meddling by govt contractor federalreserve

You need to do that. Any currency needs some mechanism to control issuing. If not the government who else could do that?

People who doubt the government and especially the fiat monetary system usually end up as "gold bugs", they start preparing for financial collapse by purchasing physical gold. Before the 2008 financial crisis, I was involved in gold circles online and everybody there knew a huge crisis was coming and they were buying as much gold as they could. Now, the price of physical gold (and many other commodities) are determined by the prices on the Comex futures exchange, which are under the control of an oligarchy of big banks.

During the financial crisis and the years after, most gold traders and gold bugs noticed that the gold price would drop every day about 09:00 on the New York Spot market, and everybody was talking about how the big banks were illicitly manipulating the gold price to try to keep it down. Of course this talk was dismissed by uninvolved as loony conspiracy theories, together with every other insulting and dismissing adjective that commenters here are so fond of.

But it turned out that the conspiracy was true, and in 2022 a couple of the bankers' fall guys were sentenced, and JP Morgan agreed to pay $920 million in fines[1]:

"The evidence at trial showed that between approximately May 2008 and August 2016, the defendants, along with other traders on the JPMorgan precious metals desk, engaged in a widespread spoofing, market manipulation, and fraud scheme. The defendants placed orders that they intended to cancel before execution in order to drive prices on orders they intended to execute on the opposite side of the market. The defendants engaged in thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts traded through the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc."

[1] https://www.justice.gov/opa/pr/former-jp-morgan-traders-conv...

The same things are going on all the time, sometimes the perpetrators are banking giants, sometimes the government or parts of government, sometimes tech giants, sometimes it's all of them together, sometimes other perpetrators.

There are many ways to pay and they have different discount rates. Some places have a cash discount, for example.

As a "tax," this falls on people who don't shop around for whatever reason. Some of them are wealthy and can't be bothered to play this game. Others might not find playing the game feasible for other reasons.

Do you think that the US government and the fed don't do this? You don't see it, of course, because they also report the numbers you use to decide if there is inflation.

And who says that it has to be controlled at all, in the sense that some singular entity controls it, rather than an algorithm?

> The controller of a currency has enormous power.

Yeh, and it's no less a problem when it's the government rather than Amazon.

> If the government can't handle it nobody can.

That's always been my point.

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

You also have to be resilient to attacks on your currency and an algorithm gives your oppponent certainty on how you will react. You need human control at some point.

Regarding payment systems specifically, people generally don't realize what they're missing.

Pick anybody from anywhere and they'll tell you they've been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country.

Articles seem to imply that it can work in complement to zelle, so that may extend it’s reach quite a bit, no?

The very fact that we have money that can appear to be yours initially, but then removed from your account if a check is reversed or disputed is costing people in time and $, and benefitting fraudsters. (advance fee fraud, Zelle "mistakes", and similar). 3 day clearing times that give people an opportunity to be scammed.

Although, irreversible + instant payments may open some new types of problems for people, I could totally see that. But people will need to learn how to deal with this more rational system. Other countries are decades ahead of us in that you are the one who has to initiate payments from your account, and only you can do that, and payments are instant and settled.

I think this is a case where setting a standard and requiring payment processors to adhere would have been a much better idea. More centralizing of power is not what we need right now.

e: ah I see the diagram now. more helpful.

[0] https://rollcall.com/2020/06/16/feds-powell-urges-congress-t...

When I started dating my wife, she called me an old man for even owning a cheque book. That was in 2006.

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 conspiracy theory. However, the “enshittification of Big Tech platforms” is already a fact, so they simply complain about it, but anytime solutions involving open source, decentralization, and utility tokens are introduced, they are violently voted down. So — since no solutions are welcomed, I guess many denizens of HN support hurtling toward extreme centralized control. After all, we’ll be able to complain about it once it’s in place, and that’s enough!

Edit: literally 5 seconds after I posted it, I received downvotes. Not fast enough for a human to read the message let alone explore the links. I wonder if it’s even automated by keyword now.

In the demos I watched, There is account number and routing number

Come on... Being capable of sending money to someone easily should not be based on the bank.

[1] https://www.npci.org.in/what-we-do/upi/product-overview

I never touched a check in my life and I get my employers payment mostly even before the end of the month?

Ideally, the government login/auth would be an opt-in for sites where anonymity isn't important. Facebook, for example, already has a real-name policy but still has fake accounts. Moderation alone isn't sufficient; it's hard to keep up with the number of bad actors. Limiting signups to verified humans, and possibly validating their nationality, can help with that IRT to bots and foreign agents.

It's important that the mechanism be opt-in, though, and yeah, metadata would be a problem. But realistically it's just a matter of degree... they already have access to all of that metadata today with just a subpoena or national security letter. Centralizing the login would make it easier for them to collect it, but also make it easier to audit via government mechanisms (FOIAs, etc.) compared to the opacity of private companies (which are under zero obligation to reveal how things are stored).

But if it did include the US, it would have the assumption that Americans are unaware how terrible our payment systems are (generally untrue I think) or unaware that other countries have better systems (may or may not be generally true).

A CBDC would mean cutting out the bank - you would hold your money digitally with the Fed, and the Fed would be liable for it.

FedNow creates a ledger that allows two banks holding their money digitally with the Fed make an instant transfer. You never become a direct customer of the Fed, but your bank and the bank of the person you're exchanging money with - both already Fed customers - have a quicker way to record the transfer.

The only relation between FedNow and a CBDC is that the Fed is involved, and, like, computers, I guess? Other than that, their mechanisms and effects have very little in common.

It isn't being seriously discussed for implementation. The working groups are disbanded. The Fed won't write it off--they shouldn't. But CBDCs are as proximate as postal banking.

On the other hand routing plus account number is kinda long.

What makes this tradeoff (of convenience vs privacy) acceptable to me is not that I trust the government, but that I already accept I have near-zero privacy right now, as it is. Making it slightly easier for them isn't a big deal. I'm not a very exciting person to begin with.

And frankly I suspect that outside of techno-libertarian echo chambers, this is the case for most regular people. They just don't really care if the government knows about them. Not everyone has the same degree of desire/need for privacy.

Not sure you need firearm / vehicle / education history for an ID system

The secondary "national" IDs most of us use are simply state IDs or driver's licenses. They're not in a federal database, but I don't understand how that's meaningfully different. It's still a big government tracking system.

The hope is not that it would kill anonymity altogether, but that it would create some alternative communities linked to real-world identities, and maybe that would help people behave better, with real-world decorum, in those specific identities. Yeah, some people would never sign up for those... and maybe that's OK, as long as the remaining community is more civil and thoughtful?

Case in point, the no fly lists, they literally don't care if they just ban all the John Smiths.

By this I mean, in the US everyone could use CashApp, Venmo, PayPal, Zelle (glorified ACH, right?), etc. for p2p payment. If you have the same bank, many banks have a trivial "send money to another customer's account" feature. However, to do so requires essentially a 'handshake' where the two parties agree on a method. Checks require no up-front handshake, since everyone knows what to do with a check (deposit it at your ATM, take a picture of it with mobile app, or take it to a check-cashing place or the issuing bank).

If I could print on paper a key or QR code that allows you to claim the money into the account of your choice, like a check does, I'd use that. Sadly, banks seem to have put their effort into Zelle instead.

It’s not unusual for me to get an invoice for a company via QuickBooks Online, with cash or check as the only payment options.

Other businesses around here have started giving discounts for paying with cash or check versus apps or credit/debit cards, to avoid the recent increases in fees.

I’ll also write checks when having a “hard” traceable payment instrument physically makes sense for auditing purposes or fraud prevention, although that’s less frequently needed.

Of all things my life insurance company is still not set up for credit card payments. In 2023.

Boggles the mind.

Australia/Canada have been doing free bank transfers since before I was old enough to know

For children. Or for state funding, but the state doesn't pay for the vast majority of plastic surgery.

> Additionally in living memory, many businesses and government services were segregated by race.

Race doesn't need affirming medical care, or identification to single out. Also, businesses and government services weren't abstractly segregated by race, they were specifically discriminatory toward black people.

Most politicians back it, so voting differently makes little difference. Labour and the Conservatives support the Online Safety Bill, the Patriot Act was bipartisan, and voters have very little control over the EU and can’t stop Chat Control. And most of “government” isn’t directly elected: you can’t vote out the NSA, and Congress has little power over them either. The government blunts corporate abuses but doesn’t stop them: revolving doors ensure authorities target small fry while big companies like Visa keep going unimpeded. And finally, most voters don’t mind surveillance that much, since government and media manufacture consent for it. Don’t count on ordinary people to “vote it out” until it’s too late.

Lobbying against government surveillance helps marginally, but it's an eternal struggle. Governments take as much power as they can get, while abuses are exponentially harder to detect and stop than refusing to grant that power in the first place. The “slippery slope” isn’t a fallacy, it’s the record of the last twenty years. Don’t let them track speech and money with a central ID and digital currency, just because you don’t like a few tech bros or online trolls.

Meanwhile the government protects many of my "freedoms" from private intrusions when it comes to things like bankruptcy protections, credit bureau limitations, telemarketing, angry gunowners, etc.

I've run into trouble with the law on a few occasions, but it was never terribly oppressive -- probably largely thanks to my race, class, and politics. If I were a poor Black man or a conservative white man, I'd probably have a very different view of government.

Thinking about it some more, I think think this just circles back to the old "freedom from" and "freedom to" debate... not sure that's worth getting too much into here, since we're unlikely to change anyone's minds or reveal new perspectives.

The government is authorized by it's own citizens to use force on some citizens (such as criminals).

That being said, your point might have been when did the government last use force in an unjust manner? That's a matter of constant political debate.

Now, obviously there are various competing services for this kind of use case already: Venmo, Cashapp, Zelle, etc. So maybe it won't be better enough to feel like an improvement, but that's the aim.

> Will there be a FedNow app for me to use?

> No. There is no FedNow app. The Federal Reserve does not provide payment services directly to consumers and businesses. Banks and credit unions can provide their customers with access to instant payments through new features on their mobile apps, banking websites, or other interfaces such as those used for business payments. Bank and credit union customers will probably not even see the name "FedNow" on their bank's instant payments platform as the FedNow Service is the high-speed highway that helps payments move from one financial institution to another. Banks and credit unions build new products for their customers that connect to the highway.

https://www.federalreserve.gov/paymentsystems/fednow_faq.htm

U.S. banking is so far behind the rest of the world. This development is very much welcome.

Indeed. Here I was thinking we'd shed the last of this "independent Fed" legal fiction during the "Great Recession."

I don’t know why anyone would assume they aren’t going to link it with the IRS, and make it available to any agency that asks.

If the plan is to offer a “money request” service and offer much the same functionality as Venmo, there will be a “for” line.

Even with credit card payments now, they are coded at a minimum.

Everything is logged always.

* Zelle is basically better bank transfers and is already supported by many (most?) US banks: https://en.wikipedia.org/wiki/Zelle_(payment_service)

* Random 'third party' money transfer services like Venmo, Cashapp, Paypal, etc.

But similar to messaging in the US, the main issue is fragmentation. There's isn't quite a national consensus like some other countries have.

Hitching a horse to a different technology platform that has only been around for a few years to complete a project that should last for many more decades would be an architectural choice that would only lead to high costs and high risk of major changes in the future and puts the whole system at risk.

It seems like requiring the consumer to manually set up a push payment to a company would probably be annoying and error prone, compared to having them entering their details on a website and then the company requesting payment.

What we call government debt is just an operational vestige.

Always so cool to hear about this sort of stuff.

So back to the question, what's the dev env look like? :)

As far as message queues go for something like the federal reserve, IBM MQ is really the only option that wouldn't raise a lot of eyebrows in the industry. The Fed is not the kind of institution that I think people would be lenient on for being open and innovative with their software solutions, banks really need to know that this thing is going to work and they all run IBM MQ themselves already. Not to mention the integration possibilities with Db2 and IMS, which are both huge in finance.

My only complaint is that it is very expensive. That's the story with most of the kind of hardcore technical products IBM sells that are likely to wind up near mainframes. I'd imagine the Fed gets a sizeable discount though.

Hey, that's neat. I'm super curious how much the internals of this thing could be compared with something like a cryptocurrency. Are those signatures representative of the identities making the transaction? Might it be technically feasible some day for me to craft a transaction on my phone to send money to someone, then publish it directly, and have the person instantly confirm that they received a payment without needing to talk to a bank?

I'm really curious if this is what is going to eventually morph into the CBDC that everyone seems so excited about, or if that project is going to start from scratch.

And this should be available to customer investors (dudes at home) before retail investors (hedge funds)

1) Write a physical check (2-10 days from deposit, usually 2) 2) Use ACH (a virtual check) (2-10 days, usually 2) 3) Fedwire which costs $10-$15 to both the sender and receiver (15 minutes).

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.

For high net wealth audits, you could have potentially dozens of people working on it for years so there is a possibility that a judge / jury rules in your favor.

They are going after low effort people, but making it up by volume.

This also depends if by "audits" you include every kind of correction letter the IRS sends you.

Wrong question. The correct question is:

What benefit would the IRS targetting low wealth individuals have to high wealth individuals?

I'll shorten the explanation even further: many more easy/no contest wins.

I'll let you figure out why.

You would think there would _at least_ be a ceiling price. Makes me wonder why they can't show _any_ pricing.

A less generous interpretation is that they coordinate harassment campaigns against transgender people and have caused at least three suicides.

Since decent online banks will let you save the details of recipients, in practice it is very smooth and uncomplicated.

You could also receive and send invoices by fax, and there's nothing wrong with that.

https://www.svb.com/news/company-news/svb-financial-group-ce...

"SVB Financial Group CEO Elected to the Board of Directors of the Federal Reserve Bank of San Francisco"

[1] https://en.m.wikipedia.org/wiki/Money_multiplier

The government would still need to go out of their way to know about that transaction. And the liability would only come after you or the organization got in trouble for something else.

I'm aware that Kafka is low-level (and that there is kmq, which tries to implement a message queue on top of it https://github.com/softwaremill/kmq/ ), but the exactly-once semantics seems isomorphic to having the sender and the receiver doing a 2 phase commit using the log.

what are MQ's guarantees? how are they implemented?

https://cloud.google.com/bigquery/docs/introduction

DuckDB and SQLite easily handle terabytes of data. They're just not so much for cloud based apps, or things that need multiusers and access control junk. They're the best choice for just about everything else though.

The point of keeping the government out of the banking business would be to keep the door cracked for the chance to improve it later. That door slams shut once the federal government has the insights into every transaction, and more importantly the ability to deny ones they don't want us to do. We also Wil have much less control over the creation of a social credit score, theoretically the government would have everything it needs to make that happen with control over our transactions.

the government already knows.

based on which criteria?

I've never in my life received a wage in cash, as in, hard dollars.

That, um, sounds reasonable to me in the context of what they're developing.

Light travels about 300km in one millisecond in a vacuum, about 200km in optical fiber. The best achievable theoretical fiber optic RTT for NYC-LA is about 35-40ms. In practice 65ms+ is more realistic due to routing overhead and the fact that cables aren’t always laid in a great circle. This being a financial API with three parties involved in most transactions (the two banks and the fed clearinghouse) there is sure to be more than one round trip involved for TLS establishment, authentication, verification of funds and account availability etc, many of which involve traversing many inevitably complicated systems on each side. It would shock me if such a system could realistically target anything less than 500ms P50.

There are physical bank note, database from different system in trust or untrusted parties that need to be cross checked and reconsolidated

Maybe I should delete this comment before someone gets an idea and starts selling their get rich quick course.

Bitcoin gets around this by having absolutely no fraud prevention, and just saying "lol sucks for you should've been more careful"...

No one is posting their private keys on github, and when they do their crypto goes poof nearly instantly. None of the exchanges publish their threat model documents. I sure as shit don't tell people where I store my private keys.

The bitcoin whitepaper and code are more analogous to the ISO standard, which is public.

I can buy an icecream anywhere in the world without anybody tracking me. Even with the "wrong" political opinion (even if I would be a trucker in Canada during certain protests).

I cannot do that with CBDC.

No. CBDC (aka: the ultimate totalitarian's dream) is not the same as the current banking system, despite the current banking system also being very horrible for privacy.

* All of the above assuming that cash will be banned and CBDC will be mandatory for everybody.

I do wonder how stuff like this will shake out. I will use a credit card, always, with any vendor that doesn't pass along credit card fees to the customer in some way. (Why would I choose otherwise? The credit card gives me rewards, and better fraud protection.)

But more and more, I see companies charging "convenience fees" for credit card usage or offering "discounts" for cash/debit. Hell, T-Mobile just started requiring you not use a credit card to get their $5/mo autopay discount.

So this is all cool (and perhaps would make it easier for people who don't have a credit card to pay for Netflix), but I don't see why I'd use anything but a credit card to pay for my Netflix subscription, unless they offer discounts for using FedNow. Which... they probably won't?