FedNow Instant Payment System Releasing for 2023.
Simplifying with transparency and improving the speed of the U.S payment system between the government and businesses is just the beginning of what blockchain can do. The financial industry is also testing its own system with the DTCC using a blockchain system to process over 100k transactions a day which is going to change the game using an instant 24/7 settlement system. These are just some examples of what blockchain can really do.
The U.S. Federal Reserve says that it will introduce its instant payments service, FedNow, by next summer. The Federal Reserve is getting ready to launch FedNow, a new payment facilitation system that could mitigate the need for a central bank digital currency. Lael Brainard, Vice Chair of the Federal Reserve, announced today that the FedNow Service is expected to go live between May and July 2023. Brainard also said the system would undergo technical testing beginning this September.
The news was revealed on August 29 at an Early Adopter Workshop in Rosemont, Illinois via webcast. During today’s workshop, Brainard called on financial institutions and software providers in the United States to update their systems in anticipation of the launch of the new service. “The shift to real-time payment infrastructure requires a focused effort, but the shift is inevitable,” Brainard said. “The time is now for all key stakeholders…to devote the resources necessary to support instant payments.”
Initiatives such as a pilot program, the FedNow Explorer resource, the FedNow Community, and the FedNow Early Adopter Workshop are expected to increase engagement. According to the Federal Reserve, FedNow is an instant payment system that offers real-time transactions between households, businesses, and financial institutions in the United States. Brainard noted that the service is built with cloud technology, allowing the payment system to scale without sacrificing resiliency. This ability to scale applies to the system’s throughput as well as its geographic coverage, ensuring continuous service even in remote regions.
FedNow is noteworthy within the crypto industry because it has been touted as an alternative to a central bank digital currency (CBDC). In particular, Federal Reserve Governor Michelle Bowman stated on August 17 that FedNow “addresses the issues that some have raised about the need for a CDBC.” Brainard, meanwhile, has indicated that launching a CBDC would require congressional approval and take at least five years to design and implement. As such, FedNow will almost certainly precede the completion of any CBDC efforts in the U.S.
Some members of their team.
Odilon Almeida - President & CEO
Scott Behrens - Chief Financial Officer
Dennis Byrnes - Chief Legal Officer
Tony Dinkins - Chief Human Resources Officer
Debbie Guerra - Chief Product Officer
Bruce Kleinsteuber - Chief Strategy and Transformation Officer
Craig Maki - Chief Development Officer
Mohammed Mortajine - Chief Risk and Administrative Officer
Ram Puppala - Chief Technology Officer
Alessandro Silva - Chief Revenue Officer
