The United States Federal Reserve announces the launch of the Fed’s most awaited service in July. ‘FedNow’ , a service that intends to provide a real-time payments system will be soon available in use.
FedNow service can revolutionize the payment system and provide a smooth transition towards cryptocurrency. The Federal Reserve was trying to formulate a detailed framework for the working of FedNow for a very long time. Additionally, this will reduce the time of transactions between the institutions and enhance the working conditions.
According to the statement released by the United States Federal Reserve on 15 March, the Reserve informed about the process of launching the service. It took almost four years to come into effect after its announcement of it in 2019. In the first or second week of April early participants are invited to adopt the testing phase of this service. Several financial institutions and service providers are invited to join the testing phase and certification program.
Ken Montgomery, the FedNow program executive, requested financial service providers and other related institutions to be ready to adopt the upcoming service. The FedNow will be available irrespective of geographical location and will work seamlessly to boost real-time payment systems.
This facility will be available for users 24 hours without any holiday in a year. Risks like data theft, hacking, and payments error will not bother us anymore after the implementation of FedNow. According to experts, this service will facilitate crypto trading companies by helping them to not leave any funds stuck online during payment transactions.
The certification program will help in understanding whether the new real-time payments system is compatible with modern technology or not.
However, this is not the first time that anyone is launching this type of transfer system. In 2017 the banking sector has already implemented its own real-time payments system (RTP) operated by The Clearing House.