Federal Trade Commission (FTC) Commissioner Rohit Chopra wrote a letter to the Federal Reserve saying projects like Libra (Facebook’s proposed cryptocurrency) illustrate the need for the bank to develop a real-time payments service, according to reports.
Chopra wrote in support of the creation of the “FedNow Service,” a real-time scheme currently being considered.
Chopra also took the time to criticize Libra.
“The vague and scant details on the tech platform’s proposed shadow global central bank have sounded international alarm bells, particularly in light of Facebook’s ongoing scandals and reputation for abuse,” he wrote. “The laundry list of risks raised by the Libra project will take time to unpack and address. I share the serious concerns raised by Chairman Jerome Powell and Governor Lael Brainard.”
However, he said he didn’t want Libra to overshadow the importance of real-time payments, saying other technologies are gaining speed and being used because there’s a “pent-up frustration” with large banking fees.
“Regardless of Libra’s ultimate fate, the proposal’s emergence underscores the appetite for real-time payments and the urgency of intervention by the Federal Reserve,” he wrote.
Little is known about FedNow, except that it would go live by the year 2024. It was announced earlier this year by Brainard.
FedNow is meant to offer an option for consumers and businesses to transfer money instantly or nearly instantly in a “ubiquitous, safe and efficient” manner from one bank account to another.
“We only get to make this kind of decision once every 30 or 40 years,” Brainard said, noting this was the biggest payments-oriented move made by the Fed since the early 1970s and the implementation of the ACH system.
“At the end of the day, we really had to look into the future, and the most decisive question was: Ten years from now, 20 years from now if we decide not to invest in real-time payment infrastructure, will we have carried out our responsibilities to the U.S. financial system and the U.S. economy?” Brainard asked.