The US Central Bank has recently announced the launch of its new payment system, Fednow, scheduled for July 2023. FedNow is an instant, fully-digital payment service that uses the American dollar–a system reminiscent of the Brazilian PIX launched in October 2020.
At first glance, this creation facilitates transactions and makes them faster since sending and receiving money are instant and don’t require payment fees–which may heat the economy. However, the Central Bank requires a lot of personal data from users to bring this plan to life.
One could argue that this is an ideal intermediary for those who want to more easily convert their assets into Bitcoin since there would be no reason to use stablecoins and other shitcoins in the process. But the solution sacrifices user privacy, just like the KYC used by some exchanges to purchase Bitcoin.
FedNow paves the way for banks to no longer mediate the relationship between the individual and the Central Bank since the Central Bank’s system computes the transactions of the individual. But this could become a problem for those who used to enjoy certain protections from banking secrecy.
In short, this is a big test for implementing a CBDC. Besides, the International Monetary Forum has already declared its intention to create a global CBDC–and the implementation of projects such as Brazil’s PIX and the US FedNow seems to support this plan entirely. Where this goes from here is still to be seen, but one thing is already clear: when it comes to privacy, these systems are the opposite of Bitcoin.