- The US Federal Reserve has launched the long-anticipated instant payment system, FedNow, with 35 financial institutions already onboard.
- The introduction of FedNow raises questions about the implications for Central Bank Digital Currencies (CBDCs).
In a watershed moment for the financial sector, the US Federal Reserve has brought its instant payment system, FedNow, into action. This transformative service, which is currently adopted by 35 banks and credit unions, allows for immediate money transfers, irrespective of the day or hour.
FED Chair Jerome Powell highlights the essence of the service, stating,
“The Federal Reserve built the FedNow Service to make everyday payments faster and more convenient over the coming years”.
Emphasizing the revolutionary potential of the system, Powell envisions real-time benefits such as instant paycheck receipt or immediate fund accessibility post invoice payment.
The FedNow Impact and Its Wider Implications
The Federal Reserve encourages more financial institutions to join the new system to promote widespread accessibility. With 16 service providers prepared to support payment processing, the FedNow service is also set to be adopted by the US Department of the Treasury’s Bureau of the Fiscal Service.
>> Buy XRP quickly and securely with PayPal, credit card or bank transfer at eToro with low fees and deposit protection. Get started with XRP now. Visit Website <<
The instantaneous nature of the payment system offers undeniable advantages across various financial and business sectors. With this innovative service, the Federal Reserve aims to operate in conjunction with its other payment services, striving to work with over 9,000 banks and credit unions across the United States.
The advent of FedNow has stirred much speculation within the financial industry. Notably, its impact on the development and deployment of a Central Bank Digital Currency (CBDC) has been a topic of intense debate. A CBDC is essentially a digital form of fiat money, backed by a central bank, making it a legal tender. The creation of such a digital currency could revolutionize how transactions are made, and with the launch of FedNow, the possibilities of CBDC implementation have become more palpable.
In this landscape of rapid financial digitization, the unveiling of FedNow sets a remarkable precedent. It remains to be seen how this instant payment system shapes the dynamics of digital transactions and potentially paves the way for a CBDC.
Best Crypto Exchange for Everyone:
- Invest in Ripple (XRP) and 70+ cryptocurrencies and 3,000 other assets.
- 0% commission on stocks – buy in bulk or just a fraction from as little as $10.
- Copy top-performing traders in real time, automatically.
- Regulated by financial authorities including FAC and FINRA.
2.8 Million Users