US Financial Landscape to Change with FedNow Instant Payment System
The US Federal Reserve has recently announced the upcoming launch of its FedNow Service in July, which aims to allow financial institutions of all sizes and locations to offer instant payment services nationwide, around-the-clock, and 365 days a year.
According to Tom Barkin, President of the Federal Reserve Bank of Richmond and FedNow Program executive sponsor, the FedNow Service will be “resilient, adaptive, and accessible” and create a “leading-edge payments system.”
Instant payment options have already been successfully trialed in several countries, with Asian countries like India and China leading the sector.
India, for example, employs an infrastructure based on the Immediate Payment Service (IMPS) and Unified Payment Interface (UPI) to offer instant payment services to customers and merchants. Global data shows that India is the most active market, with transaction volume hitting $39.8 billion in 2021.
Meanwhile, China has widely used Alipay and WeChat for instant mobile payments, and the nation has pushed to adopt a digital yuan as its centrally-backed digital currency.
Although the move towards instant payments could potentially accelerate the integration of Central Bank Digital Currencies (CBDCs) in the US, their adoption is still uncertain. The CBDC Working Group is currently exploring the potential of CBDCs, and a decision on their adoption is pending.
Meanwhile, Ripple is in discussions with over 20 central banks globally regarding CBDC initiatives, but the US is not currently involved. Additionally, CBDCs have caused quite a commotion, with Republican Senator Tom Emmer launching an Anti-Surveillance Act to expand the right to financial privacy.
Launching the FedNow Service is a significant step for the US financial sector, allowing financial institutions to offer instant payment services nationwide. However, the adoption of CBDCs in the US is still uncertain, and Ripple is in talks with global central banks regarding CBDC initiatives, but the US is currently excluded.
The move towards instant payments has increased interest in CBDCs, but whether they will be adopted in the US remains to be seen.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
