The final report of the Committee on the Federal Reserve in the Payments Mechanism-the Rivlin committee-makes an eloquent case for Fed leadership in the evolution of the U.S. payment system. This especially applies to the transitional period between our current, largely paper-based environment and the eventual emergence of a universal, reliable, and cost- effective electronic alternative.

In considering and rejecting scenarios that have the Fed exiting payment markets through liquidation or privatization, the committee concluded, for all intents and purposes, that leadership is the central bank's only prudent option. This recommendation is welcome, if overdue. It is especially welcome for its realistic assessment of the "checkless society" as a phenomenon not exactly just around the corner.

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