The Federal Reserve’s financial services department announced that a new quick payment service named FedNow will be introduced soon. If all goes according to plan, the system will formally launch in July.
According to Ken Montgomery, a FedNow program executive and first vice president of the Federal Reserve, the solution will enable financial institutions nationwide to provide clients with cutting-edge immediate payment services.
FedNow technology will allow participating lenders and financial institutions that are under the central bank’s authority to enable 24/7 payments.
Tom Barkin, president of the Federal Reserve Bank of Richmond and executive sponsor of the FedNow Program, asserts that the answer is a modern, adaptive, and robust payment system. He continues by saying that the establishment of FedNow is an important step in the effort of the central bank to assist financial institutions in better meeting the demands of consumers for quick payments to support almost every sector of the US economy.
As a result, the Fed’s most recent announcement is receiving mixed reactions on crypto Twitter, with some observers arguing that it could be an attack on Ripple’s XRP at a time when the Fed’s rapid rate hikes in recent months have sparked a severe crisis across the banking industry, leading to the failure of several crypto-friendly lenders, including Silicon Valley Bank, Signature Bank, and others.
In other headlines, the Federal Deposit Insurance Commission is still seeking a buyer for SVB and Signature Bank. The agency has made it plain that any potential buyer for the former must be ready to shut down the bank’s cryptocurrency operations.