US Federal Reserve Tries To Play Crypto Catchup With “Same Day ACH Payments”

They are on the run! Well... at least that is the way that I see it. Cryptocurrency seems to scare central banks and governments because of their lack of control over it. The very ethos of Bitcoin is that of a currency that can be transacted without the need of a third party like a bank or Federal Reserve.

In this fast-paced modern life people demand a better solution then the ones we have been given by 3rd party companies and cryptocurrency (in particular blockchain technology) has filled the needs of the people in a way that no central bank or authority can. Humans want things instantly and for as cheap as they can possibly get it (for the most part!), and the antiquated ways of the our US financial institutions have simply not kept up with user demand.

The Crypto Catchup

In 2016 the National Automated Clearing House Association (NACHA.org) rolled out plans for a "Same Day ACH" option to be adopted by the organization in September of 2016.

You know what an ACH is right?

No?

It stands for Automated Clearing House and has been a US standard since the early 80's. It is used to transfer a TON of money each day, and about 60% of all ACH transactions go through the Federal Reserve (while the other 40% are processed by the EPN). If you ever had direct deposit of your pay check or had to transfer money from one bank to another persons bank you have utilized the ACH network. It's safe to say that the US Government and Federal Reserve have milked the ACH cow as long as they could and now something new looms in the distance. The real question is; Is it too late for them to catchup?

Same Day ACH Adoption

While the NACHA recommended this network upgrade last year, the Federal Reserve is only getting on board with a 3 phase rollout which started September 11th this year going into mid 2018 to complete the new changes to their policy to adopt the NACHA regulations in regards to Same Day ACH transactions. Of course, they are doing so with some exceptions to the guidelines the NACHA set forth. You can find the full text of what they are adopting and what they are throwing out in this PDF right here.

While the Federal Reserve may be finally getting on the fast payments gravy train, it will have taken them almost 2 years to make a decision and implement that change into their infrastructure. During this time the cryptocurrency market continues to explode with new technology as thousands and thousands flock to the benefits of transacting in Bitcoin & Cryptocurrencies. By the time you can actually make a Same Day ACH transfer next year through the ACH network, the Federal Reserve will be exponentially farther behind the cryptocurrency world. Almost 2 years to implement a technology that is already a decade behind!!



The Faster Payments Taskforce

I will say that at least the government is trying to take the situation seriously. They have quickly come to the realization that they are losing their control over the money in the United States. Enter in The Faster Payments Taskforce! Yep, they even have a whole task force now dedicated to faster payments... that they still fully control. Here is what the FPT has to say about itself from their report THE U.S. PATH TO FASTER PAYMENTS FINAL REPORT PART ONE: THE FASTER PAYMENTS TASK FORCE APPROACH :

"The Faster Payments Task Force is a broad and inclusive group of payment industry stakeholders with representatives from organizations across the payment ecosystem, including financial institutions, non-bank payment providers, regulators, standards bodies, consultants, businesses (merchants and corporates), and consumer groups. The Federal Reserve assembled the task force to collaboratively identify and evaluate alternative approaches to implementing safe, ubiquitous, faster payments capabilities in the United States."

There is a lot of interesting research in the 50+ pages of the document, and they very carefully avoid using the words "cryptocurrency" or "blockchain", although they are mentioned. In one section they talk about Blockchain and acknowledge "This might change the roles of traditional players in payment clearing and settlement processes—for example, by eliminating the need for some types of centralized transaction bookkeeping". I thought this was pretty interesting to admit. I also dug deeper and found a section titled "Capability Showcase" where financial companies submitted solutions they thought would help with faster payments. Of note, a company called CyberBanque submitted a solution for "CyberMoney" which as they state in the document "CyberMoney® is not cryptocurrency. Applications securely reside on consumer mobile devices and merchant POS devices, enabling end-to-end encrypted mobile payments". They also mention it can be integrated into most "digital wallets"... hmmm. I also found another submission by SupiPay Inc. by
Moshulu Group that states their tech uses "End to end tokenized cryptography" but that "All functions are tightly integrated into a Centralised Electronic Control Center". So basically a centralized cryptocurrency??

Just a few months ago, this same task force released second part of this study, which ones again seems to support a cryptographicly secured fast payments system that utilizes emerging technology like blockchain. They go to great lengths to NOT say cryptocurrency and blockchain in the document once again, but everything they are saying is pointing to that from my opinion. Read for your self here: FINAL REPORT PART TWO: A CALL TO ACTION

Once again, all I see is a ruling set of banking organizations on the ropes and trying to play the cryptocurrency catchup game, but still being lightyears behind what is going on in the greater cryptocurrency & blockchain tech movements. Will the big guys be able to catch up and centralized cryptographically secured instant payments using blockchain technology, or will an open source, decentralized solution triumph? I am personally here to support an open source solution that is decentralized as possible. 

The consumer has spoken! We don't want a centralized solution anymore! We don't want organizations that are profiting off holding our money more then we profit! The US government & Federal Reserve don't care what YOU want, they are going to create a solution that they control and benefits them the most. You may still have to use ACH for the most part to transfer your fiat to cryptocurrency, but I think even those days are numbered.

Share your thoughts with The 'Stache on this subject, because I really don't want to hear some other opinions on this particular subject!

Catch My Crypto Stache If You Can Feds!

Shea Newkirk

The ‘Stache
Howdy! My name is Shea Newkirk and I have been a Bitcoin supporter since 2014. I am immersing myself in the cryptocurrency world and I decided to jot down my story as things unfold. I am a designer, coder, musician, gamer, father, blogger, entrepreneur & more. Learn from my mistakes and rejoice in my triumphs because the ‘Stache is set to disrupt the crypto world!

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