The Federal Reserve has certified the FedNow Service as “ready” following successful testing with 41 financial institutions, 15 service providers, and the U.S. Department of the Treasury.
The service is set to launch by the end of July 2023.
The Federal Reserve of the United States clarified that its new instant payment service for organizations, called FedNow Service, is not related to central bank digital currencies (CBDCs).
The Federal Reserve certified the FedNow Service as “ready” after successful testing with 41 financial institutions, 15 service providers, and the U.S. Department of the Treasury. The service is scheduled to launch by the end of July 2023.
However, the central bank clarified that the promise of instant fiat payments and real-time gross settlement (RTGS) is not powered by a CBDC.
#FedFAQ: Is the FedNow Service replacing cash? Is it a central bank digital currency?
Learn more about the #FedNow Service:https://t.co/ACBjfEhR4A https://t.co/IXF8dyy46S pic.twitter.com/7CUaYZYyM9
— Federal Reserve (@federalreserve) July 19, 2023
In a tweet, the Federal Reserve clarified that the FedNow Service operates similarly to other payment services like Fedwire and FedACH, functioning within the boundaries of the fiat ecosystem. It explicitly stated:
“The FedNow Service is not related to a digital currency. It is a payment service made available for banks and credit unions to transfer funds for their customers.”
The Federal Reserve reaffirmed that it has not made a decision on issuing the highly anticipated CBDC. It clarified that any issuance of a CBDC would only happen with an authorizing law in place.
On May 11, the Federal Reserve announced the integration of Metal Blockchain into the FedNow Service.
Metal Blockchain’s listing in the FedNow Service Provider Showcase. Source: FedNow
Metal Blockchain, developed by Metallicus, is a crypto network based on a fork of Avalanche’s code. The network includes a subnet called “X-Chain” that enables developers to set rules for asset transfers. For instance, tokens can be issued with rules like “can only be sent to US citizens” or “can’t be traded until tomorrow.”
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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