The US Federal Reserve announced that it will develop a payment system FedNow, which will enable faster payments between US banks. The service is intended to facilitate not only domestic payments, but is aimed at cross-border ones.
According to an official announcement, the decision to create a real-time settlement network for Fed banks was a kind of reaction to public feedback about the Fed's participation in the development of payment services system. The announcement states the following:
“The FedNow Service is intended to advance public policy goals for faster payments and to help support the modernization of the nation’s payment capabilities. To accomplish these goals, the FedNow Service will enable financial institutions’ provision of end-to-end faster payment services and, in combination with private-sector real-time payment services, provide infrastructure to promote ubiquitous, safe and efficient faster payments in the United States.”
Due to the fact that the Fed is ready to launch its own payment system, many blockchain projects will face serious competition from it. For example, the Ripple payment network uses the XRP token for liquidity, which the government still has not approved yet.
Image courtesy Crypto Economy