Fed Rejects FedNow Cryptocurrency Related
- In its recent report, the Fed responded that FedNow has nothing to do with cryptocurrencies.
- It could launch in July this year. It is a payment service that the Federal Reserve provides to banks and credit unions to transfer money.
- The Fed has not yet decided to issue a CBDC, nor will it issue a CBDC without explicit support from Congress and the executive branch.
The Federal Reserve states that FedNow is not a CBDC and that this service has nothing to do with digital currencies.
The Federal Reserve has released a document on its official website that answers frequently asked questions about the FedNow real-time payment system. The Federal Reserve states that this service has nothing to do with digital currencies and that it is not a CBDC.
FedNow is a payment service the Federal Reserve provides for banks and credit unions to transfer money. It is similar to other Fed payment services such as Fedwire and FedACH. This service is neither a form of currency nor a step towards eliminating any payment, including cash.
While services like PayPal and Venmo have revolutionized the world of direct, person-to-person payments, FedNow’s mission is to increase accessibility, efficiency, and widespread adoption from merchants’ regional banks.
It will be made available to depository institutions in the United States, including banks and credit unions, allowing customers to submit quick payments using their accounts. Immediate payments make it possible for people and businesses to send and receive money in seconds, at any hour of the day or year, so the recipient may almost immediately put it to use. This service will launch in July 2023.
The Fed stated that it has yet to decide to issue a CBDC and will only issue a CBDC with explicit support from Congress and the executive branch, preferably in the form of specific authorizing legislation. CBDC will not replace cash or other payment methods.
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