In an aim to boost the country’s payments infrastructure, the United States Federal Reserve Board plans to unveil a service that would enable real-time payments and settlements.
The Federal Reserve System’s Board of Governors asked Federal Reserve Banks to come up with a new interbank real-time settlement service that will quicken payments within the U.S. according to an Aug. 5 press release.
Apparently, the payment system purportedly set to be launched in 2023 or 2024, is known as FedNow.
Once FedNow is launched, Fed will now work toward upgrading payment system with a real-time service, which enables 24/7 transfer of funds — encompassing weekends and weekdays. Businesses, as well as the general public, will comfortably be able to access the service.
For consumers to manage their money more flexibly and make time-sensitive payments, the Fed has requested contributions about the new service’s possible design and functionality.
Lael Brainard — Federal Reserve Board Governor —made comments on the issue:
“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.”
Contribution to the community
Fed’s plans to launch its real-time payment system nonplussed some cryptocurrency community members.
Morgan Creek Digital Assets (crypto asset management firm) co-founder Anthony Pompliano tweeted that “Bitcoin is already available.”
Contributions toward the project will also come from other crypto-related companies. Ripple Labs became elected to the Faster Payments Task Force Steering Committee of the Federal Reserve in June. This initiative was aimed at making U.S. payments network to be ubiquitous, fast, and safe.
Last week, Federal Reserve cut interest rates, and some experts have already partially attributed it to the recent bitcoin’s price.
Tom Lee, Fundstrat Global Advisors co-founder, stated:
“Bitcoin’s becoming increasingly a macrohedge for investors against things that could go wrong. Rate cuts are adding liquidity. Liquidity is pushing money into all these risk assets and also hedges, which is helping Bitcoin.”