US central bank has rolled out its own instant money transfer service for banks
The tweet states that it will allow banks to send funds on the request of their clients "instantly, any time of the day, on any day of the year."
Federal Reserve launches its crypto rival project
According to the Fed's press release, this payment infrastructure includes 35 financial institutions, U.S. Department of the Treasury's Bureau of the Fiscal Service, along with almost 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 the day, on any day of the year. Read 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 be operating across the entire United States, providing instant payments as demand from customers keeps growing.
Currently, the Fed is negotiating with more than 9,000 U.S. banks, trying to persuade them to join the FedNow network to expand it and provide more benefits to U.S. retail and corporate customers.
Now, the Fed has decided to create its own payments system that will be able to keep customers out of crypto, and which would operate within the traditional financial system based on fiat currencies but would be faster than such remittance giants as Western Union and MoneyGram.
Aside from that, the Fed has been looking into the creation of the digital U.S. dollar, the so-called FedCoin, a CBDC.
Here's indirect connection between FedNow and Ripple
FedNow is part of the ISO 20022-based network, which is also used by Ripple Labs. It is not the only Ripple customer chosen by the Fed to help it create the payments system. ACI Worldwide has been working on it too, since January 2021.