The United States Federal Reserve has announced that its own instant payment service will go live in July. Dubbed FedNow, the solution will enable instant payments on a 24/7 basis within the US.
The Federal Reserve‘s financial services division has announced plans to launch a new instant payment service called FedNow. If everything goes as planned, the system will officially go live in July.
Ken Montgomery, a FedNow program executive and first vice president of the Federal Reserve, has stated that the solution will make it possible for financial institutions within the country to offer customers “a modern instant payment service.”
Through the FedNow solution participating lenders and financial institutions under the purview of the central bank will be able to facilitate payments around the clock.
Tom Barkin, president of the Federal Reserve bank of Richmond and FedNow Program executive sponsor, describes the solution as a “leading-edge payments system” designed to be resilient, adaptive, and accessible, adding that FedNow creation is an essential milestone in the central bank’s journey to “help financial institutions serve customers needs for instant payments better to support nearly every aspect” of the US economy.
Mixed reactions
At a time when the Fed’s rapid rate hikes in recent months have triggered a severe crisis across the banking industry, with several crypto-friendly lenders, including Silicon Valley Bank (SVB), Signature Bank, and others going bankrupt, the Fed’s latest announcement is attracting mixed fractions on crypto Twitter, with some observers arguing that the move could be an attack on Ripple’s XRP.
In other news, the Federal Deposit Insurance Commission (FDIC) is still searching for buyers for Signature Bank and SVB, and the agency has made it clear that any buyer of the former must be willing to shutter the bank’s crypto businesses.
