Caitlin covered this on a recent podcast with Laura Lin and Meltem, but this is the point most people seem to be missing. The velocity that FedNow could enable could be catastrophic to banks.

The lack of reserves + instant transfer could cause bank runs that make SVB look tame. Any move that banks make to limit this velocity will immediately trigger people to scream CBDC lockdown, which they are already looking for, and that could cause a collapse in trust for that reason.

It’s going to be a fascinating shitshow.