People see the FedNow instant payments service as a step toward putting in place a CBDC in the future.
The U.S. Federal Reserve has moved the launch of its FedNow platform for instant payments to between May and July of 2023.
A press release says that the service will be available to financial institutions of any size. This will allow them to help consumers and businesses make instant payments, giving them full access to funds right away. More than 120 organizations, like U.S. Bank and Alacriti Payments, are taking part in the pilot phase of the platform, which is still in its early stages.
The FedNow platform was first announced in August 2020 by Lael Brainard, who was then the Fed Governor and is now the Vice Chair. It is seen as a step toward a central bank digital currency (CBDC).
In a press release from the central bank, Ken Montgomery, who is in charge of the Service program, said, “The benefits of instant payments are becoming more important to consumers and businesses, and financial institutions will need to be able to offer this service to stay competitive.”
