The Federal Reserve Board announced that its real-time payments system, FedNow Service, is expected to launch in mid-2023.
A new quick payment service named FedNow will soon be introduced, according to the Federal Reserve’s financial services section. If all goes according to plan, the system will formally launch in July.
According to Ken Montgomery, a program executive for FedNow and first vice president of the Federal Reserve, the solution will enable financial institutions across the nation to provide consumers with “a modern immediate payment service.”
Participating lenders and financial institutions under the control of the central bank will be able to facilitate payments around-the-clock using the FedNow technology.
The solution is described as a “leading-edge payments system” by Tom Barkin, president of the Federal Reserve bank of Richmond and executive sponsor of the FedNow Program.
He also notes that the establishment of FedNow is a crucial step in the journey of the central bank to “help financial institutions serve customers needs for instant payments better to support nearly every aspect” of the US economy.
Mixed Reactions
The Fed’s most recent announcement is receiving mixed reactions on cryptocurrency Twitter, with some observers arguing that the move could be an attack on Ripple’s XRP.
This comes at a time when the Fed’s rapid rate hikes in recent months have caused a severe crisis across the banking industry, with several crypto-friendly lenders, including Silicon Valley Bank (SVB), Signature Bank, and others going bankrupt.