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i've never heard the term narrow banking, but after looking it up isn't that effectively what this company is attempting:

https://jiko.io/

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It's not. A narrow bank is one that effectively passes on the federal funds rate as interest to a demand checking account. T-bills are a completely different animal.

Merely substituting one low-risk instrument for another doesn't seem like a meaningful difference in this context.

Coincidentally, just two days ago I commented on the distinction to someone suggesting this kind of service: https://news.ycombinator.com/item?id=35790913

There's one critical difference, which is that only chartered banks within the Federal Reserve system can take advantage of the federal funds rate, whereas anyone (including individuals) can buy T-bills.

The Fed, for various reasons, implicitly disallow this type of narrow bank. Several people have tried but the Fed always denied their application to join the system.

Aren’t they basically the same rate?

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