EDITOR NOTE: Yesterday was something of an embarrassing omen for the Fed. In the hours that the Fed testified in front of Congress, talking up the widespread impact and benefits of a digital dollar, its system for allowing banks to send money back and forth goes down for hours. If a bank’s digital system experiences an ACH outage, it can have a major impact on its customers. The impact may be severe, but because there are hundreds of banks across the country, its impact is limited. That’s the benefit of having many competing businesses in the same industry. With the Fed, we’re not only talking about a monopoly of money--we’re talking a monopoly on what may end up being the “only” legal tender in circulation, the sole right to issuance of this money, and all of the systems that distribute this money. It’s a double-bind: if the Fed is successful, they’ll achieve a “hyper-monopoly” that puts all American households under its financial submission, surveillance, and control; if the Fed’s system fails, businesses and households can be severely disrupted as the Fed owns the entire process from money creation to distribution. What the Fed is proposing is a dangerous and draconian agenda under the guise of a humanitarian ideal (financial inclusion for all). There is nothing stopping the Fed from abolishing your financial privacy and transactional freedom should the digital dollar replace cash. It can impose a hidden tax on your money by inflating it at will, or it can reduce your wealth by implementing negative rates at will. The only solution to this dystopian eventuality is to “short the Fed'' by taking your money out of the system--hedging it by investing in non-CUSIP gold and silver. Doing otherwise may amount to handing your future wealth prospects over to the central bank whose main priority is to support the top 1% of Americans at the expense of everyone else.
The Federal Reserve’s system that allows financial institutions to send money back and forth electronically went down for several hours Wednesday, but appeared to be coming back online later in the afternoon.
The “operational error,” as the Fed described it, impacted multiple services, including its pivotal automated clearinghouse system, which connects depository and related institutions sending electronic credit and debt transfers.
There were no initial indications that foul play was suspected.
Along with the Fed ACH service, other systems impacted included Check 21, FedCash, Fedwire and the national settlement service.
A statement from the central bank said it became aware of a problem around 11:15 a.m. ET. A person at one Wall Street bank said the Fedwire and ACH system appeared to be coming back online around 2:45 p.m. ET.
“Fedwire Funds Service, Fedwire Securities Service, and National Settlement Service have resumed processing and are operating normally,” the Fed said around the same time.
The statement further noted that the glitch impacted payment deadlines and said the Fed “will communicate remediation efforts to our customers when available.”
No further information was available.
The list of services impacted: Account Services, Central Bank, Check 21, Check Adjustments, FedACH, FedCash, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web, Fedwire Funds, Fedwire Securities and National Settlement.
The outage occurred the same week Fed Chairman Jerome Powell spoke to Capitol Hill legislators about the progress the central bank has made on its consumer-focused payments system and efforts to develop a “digital dollar.”
Powell said this will be “an important year” for the program’s development.
“It’s going to be a year in which we engage with the public pretty actively,” the central bank leader said during a House committee hearing.
The Fed has been developing a digital payments system for several years that, among other things, would help unbanked people have greater access to payments systems.
Powell didn’t provide specifics but noted that the Fed could need some official authorization to proceed with its plans.
“We could well need legislative authorization for such a thing,” he said.
Outages, particularly with the ACH system, can have wide-ranging impacts. The system handles direct deposits of payroll, Social Security and income tax refunds as well as auto payments for mortgages and utility bills.
FedCash distributes currency and coins, which have been in tight supply since the Covid-19 pandemic took hold. FedWire is a settlements service, while FedLine provides alternative services to the ACH sytem.
Originally posted on CNBC