The Federal Reserve Act from 1913 incentivizes banks to join the Federal Reserve payments network. Let me update this to 2020s lingo: The Federal Reserve System is a decentralized autonomous organization (DAO) that pays its stakers 6% annually. It has operated for over 100 years flawlessly. The stakers gain access to a market leading depository and credit system, and have the ability to voice opinions on some variables but the shares itself are non-voting. Like many kinds of entities such as trusts and foundations, there are no owners, only trustees.
The human interface to the system is a separate public agency called the Board of Governors, which simply tells the public what the Federal Reserve has done, and also communicates any changes to the Federal Reserve's charter (any legislative updates) to the DAO.
It's just that decentralized is not what I'd call a system controlled by 7 people that in turn controls the legally enforced tender of over 300 million people.
There's a big difference: the Federal Reserve System lives in the real world, where node misbehavior (i.e. officers doing bad things) is punished with jail time, with ruinous downstream consequences on their families.
Wake me up when The DAO hacker is caught and put in jail, and I'll re-consider the analogy.
Haha Ill entertain this bit: there are no criminal consequences for misbehaving as a node. Participation of a reserve system shareholder is quite limited and only partially helps assist with routing and regional statistics. Partially.
There constraints on being a bank at all are not limited to federal reserve banks.
The human interface to the system is a separate public agency called the Board of Governors, which simply tells the public what the Federal Reserve has done, and also communicates any changes to the Federal Reserve's charter (any legislative updates) to the DAO.