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The US Federal Reserve has said it will introduce FedNow, an instant payment service, by next summer.
The Federal Reserve is preparing to launch FedNow, a new payment facilitation system that could alleviate the need for central bank digital currency.
Federal Reserve Vice Chairman Lael Brainard said: announced today The FedNow service is expected to go live between May and July 2023. Brainard also said the system will undergo technical testing from September this year.
The news was released via webcast at the Early Adopter Workshop in Rosemont, Illinois on August 29th.
At today’s workshop, Brainard called on US financial institutions and software providers to update their systems in anticipation of new service launches.
Migration to a real-time payments infrastructure requires focused effort, but it is inevitable, said Brainard. For all key stakeholders, the time has come to commit the necessary resources to support instant payments.
Initiatives such as pilot programs, FedNow Explorer resources, the FedNow Community, and the FedNow Early Adopter Workshop are expected to increase engagement.
according to federal reserveFedNow is an instant payments system that provides real-time transactions between US homes, businesses and financial institutions.
Brainard said the service is built using cloud technology, allowing the payment system to scale without sacrificing resilience. This scaling capability is applied to the throughput of the system and its geographic reach to ensure continuous service even in remote areas.
FedNow is notable in the crypto industry as it is touted as an alternative to central bank digital currencies (CBDC).In particular, Michelle Bowman of the Federal Reserve said upon August 17th FedNow “addresses issues raised about the need for CDBC.”
Brainard, on the other hand, shown Launching a CBDC requires parliamentary approval, It takes at least five years to design and implement. As such, FedNow will almost certainly be done before the CBDC effort in the US is complete.
Disclosure: At the time of writing, the creator of this feature owned ETH and several other cryptocurrencies.
