The United States Federal Reserve has formally launched its much anticipated FedNow payment service.
The Federal Reserve has hailed the FedNow service as one that will enable Americans to send and receive payments instantaneously and around-the-clock, 24 hours a day.
The FedNow service’s role in modernizing the American payment system is proof of the apex bank’s willingness to adapt and join the payments revolution by offering an equally robust service to all Americans.
Currently, there are numerous problems with the country’s payment system, including but not limited to high transaction costs and lengthy settlement times. Since 2019, the Federal Reserve has been considering launching this service as new technologies, particularly blockchain, have started to take over the payment environment.
The FedNow service is not the first of its sort; in the past, similar services have been offered by other independent nations such as the United Kingdom, Brazil, and India.
With 41 banks and 15 service providers granting Federal Reserve licenses to use the program, FedNow is making its market debut. Although the list of authorized users is already large, the Federal Reserve plans to add more users soon.
With obvious distinctions between its operational approach and that of third-party payment service providers like Paypal and Venmo, many industry stakeholders have praised the FedNow service.
Depending on how much Americans accept new technology, the introduction of the FedNow payment service is expected to impact the cryptocurrency ecosystem.
Although authorities now ignore Bitcoin’s (BTC) legal currency status and dismiss it as a payment token, it is already regarded as one of the most innovative payment tokens.
The likelihood that American banks will soon begin using XRP and the On-Demand Liquidity (ODL) service from Ripple Labs for international transactions has increased in light of the most recent XRP verdict. Despite its extensive coverage, FedNow will face competition from these systems that have been used and tested for years.
