Federal Reserve Long-awaited real-time payment system FedNow to be launched in July As the central bank said in a statement on Wednesday,
The FedNow service is intended to address the existing delays in clearing financial transactions between institutions. It will begin accepting the first participants early next month. And the system works 24 hours a day and provides instant access to full funds.
“We urge financial institutions and industry partners to Fully accelerated by preparing to join FedNow,” said Ken Montgomery, Chief Operating Officer of the Federal Reserve Bank of Boston.
FedNow is also seen as a potential model for a central bank digital currency (CBDC), although such a service could undermine one of the digital dollar’s key strengths, the cryptocurrency. With “immediate transferability,” Fed officials said the agency has yet to make any decisions about future US CBDCs, which will require the support of Congress, the Biden administration, and the public.
TD Cowen analyst Jaret Seiberg suggested the system could be used by crypto investors as a way for them. “To fund and cash out trades without leaving cash or digital dollars on the trading platform.”
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