The Federal Trade Commission is calling for consideration of the launch of new instant payment solutions. The latter has been discussed since 2018. Office spokesman Rohit Chopra believes the Federal Reserve System should do it. Taking into account the ambitions of the Libra project, the Federal Reserve is obliged to develop its own payment system, the expert said.
Chopra appealed to the US Federal Reserve. In a letter to the regulator, the specialist criticised the initiative of Facebook, and also spoke positively about the creation of the ‘FedNow service’ — a system that can make transfers in real time around the clock. The FTC Commissioner writes that the announcement of Libra has raised international concern. The fintech platform scheme proposed by the social network implies the creation of a shadow global central bank. The reputation of Facebook also raises a lot of questions, the expert added.
Competition between the public and corporate sectors
Rohit Chopra shares the concerns of the FBI and Congress regarding the Libra currency and offers a solution to the problem. In order to compete with private stablecoins and blockchain projects, the government needs to develop its own controlled online payment system. Such a state product can satisfy the needs of the population no worse than the Libra project.
According to Chopra, the Federal Reserve should address the issue as soon as possible. The prospects for launching the Zuckerberg crypto project are not very clear now, however, the interest of users in convenient payments is undeniable. Private corporations want to control the market and constantly offer new solutions and products; authorities should not lag behind fintech companies. The payment sector is the most important infrastructure for the economy, the expert concluded.
Banks currently charge excessively high fees for transfers, Chopra notes. Consumers are dissatisfied with the current situation, and new technological solutions offer more convenient and cheaper products.
It is not known the way the FedNow project will be implemented. The system is likely to offer additional features to retail and corporate users. The launch of the service will take place no earlier than 2024.