The U.S. Federal Reserve announced the launching of the “FedNow” instant payment system in July 2023.
According to the announcement, the Federal Reserve will formally certify participants for the service’s launch during the first week of April.
“Many early adopters have declared their intent to begin using the service in July, including a diverse mix of financial institutions of all sizes, the largest processors, and the U.S. Treasury,” the Federal Reserve noted.
Businesses and individuals can send and receive instant payments through financial institutions participating in the FedNow Service.
Recipients will have full access to funds immediately. The FedLine network of the Federal Reserve will be used to grant access to the service.
To expand the availability of immediate payments, the Federal Reserve stated that it would work to enroll as many financial institutions as necessary. The FedNow service intends to close the payment time gap among financial institutions in the U.S.
Early adopters will finish a customer testing and certification phase driven by feedback from the FedNow Pilot Program to prepare for sending live transactions through FedNow Service.
The Federal Reserve and certified partners will conduct production validation activities in June to ensure readiness for the July launch. The service doesn’t rely on blockchain technology.
The FedNow Service will debut with value-added capabilities, core clearing, and settlement capabilities. Future updates to the service will provide additional features and improvements.
As the Federal Reserve was responsible for providing instant payment services, U.S. crypto firms are in a dilemma as crypto-friendly banks are crumbling one by one. Shares of Silvergate Bank fell as it suspended payments of the crypto network recently.
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