The United States Federal Reserve Board has officially revealed that it will launch a real-time payments settlement service. This initiative is aimed at boosting the payments infrastructure in the nation. Moreover, this comes as banks are increasingly looking to crypto for real-time global payments.
The FedNow Service will work 24/7
This news came in an official press release on August 5th. The service will be called the ”FedNow Service”. Moreover, it will work around the clock and attempt to create a system for faster payments in the United States.
Moreover, this new interbank real-time payment settlement service is said to be planned to launch in either 2023 or 2024. What’s more, the service will reportedly be available both to companies and to private individuals.
The decision to overhaul that United States’ payment system, with a more modern one which works on both weekdays, evenings and weekends, comes as large financial institutions have already begun to dabble with crypto and blockchain payments to solve quick global payment settlements.
In the official press statement, the Federal Reserve notes that this will ”yield economic benefits for individuals and businesses by providing them with more flexibility to manage their money and make time-sensitive payments.”
In addition to this, the Federal Reserve Board now requests public comment on how to design this upcoming real-time payment settlement system.
Is the Fed looking to take on crypto?
The Federal Reserve Board Governor Lael Brainard notes that ”everyone deserves the same ability to make and receive payments immediately and securely, and every bank deserves the same opportunity to offer that service to its community.”
“FedNow will permit banks of every size in every community across the country to provide real-time payments to their customers.”
This is, of course, a belief that most crypto users and crypto companies have held for a long time. It is encouraging to see the Federal Reserve acknowledge that it needs a real-time payment settlement system. However, it is less encouraging to see it only be done under pressure from crypto.
Furthermore, the crypto community has shown some confusion over this. Specifically why the Federal Reserve should dedicate five years to developing a new system when crypto solutions are already available.
Anthony Pompliano, the co-founder of Morgan Creek Digital Assets, has since tweeted that ”Bitcoin is already available”. Gabor Gurbacs, the VanEck subsidiary MV Index Solutions’ director of digital assets strategy, instead tweeted a more diplomatic reply to the upcoming Federal Reserve real-time system:
”Great that the @federalreserve is taking a forward looking and intelligent stance regarding innovation in #DigitalAssets and #payments. I recommend considering the benefits of #Bitcoin, a functioning, reliable, trust-minimized base-layer for sound money.”
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.