Crypto Rival Service Launched by Federal Reserve: Details

[ad_1]

Youri Molchan

The US central bank has rolled out its own instant money transfer service for banks

Content

The Federal Reserve launches its rival crypto projectHere is the indirect connection between FedNow and Ripple

In a recent social media post, the US Federal Reserve announced the launch of its own instant money transfer service that can be used by banks and credit unions, called FedNow.

The tweet says it will allow banks to send funds at the request of their customers “instantly, any time of the day, any day of the year.”

The Federal Reserve launches its rival crypto project

According to the Fed’s press release, this payment infrastructure includes 35 financial institutions, the Bureau of the Fiscal Service of the US Treasury Department, as well as nearly 20 service providers.

Just launched, the #FedNow service allows banks and credit unions to transfer money on behalf of their customers instantly, any time of day, any day of the year. Learn more: https://t.co/jP2et4nzcl #instantpayments #paymentsindustry #FederalReserve #financialservices pic.twitter.com/Rl2TfrxeVQ

Federal Reserve Financial Services (@FRBservices) July 20, 2023

The new money transfer service will work across the United States, providing instant payments as customer demand continues to grow.

Currently, the Fed is negotiating with over 9,000 US banks, trying to persuade them to join the FedNow network to expand it and provide more benefits to US individuals and businesses.

The Federal Reserve, along with the entire banking system and the SEC, oppose cryptocurrencies, saying they are only used for money laundering and other criminal activities. Although at least Ripple aims to work with banks and other traditional financial institutions, at the time the company was deeply engaged in the SEC’s lawsuit against it.

Now, the Fed has decided to create its own payment system that will be able to keep customers off crypto, and that would work in the traditional fiat-based financial system but be faster than remittance giants like Western Union and MoneyGram.

Apart from this, the Fed has been looking into the creation of the digital US dollar, the so-called FedCoin, a CBDC.

Here is an indirect connection between FedNow and Ripple

The first mentions of FedNow date back to early 2021, when Ripple’s client Volante Technologies began collaborating with the Fed to develop this instant payments service.

FedNow is part of the network based on ISO 20022, which is also used by Ripple Labs. It’s not the only Ripple client chosen by the Fed to help build the payment system. ACI Worldwide has also been working on this since January 2021.

[ad_2]