Reserve

United

Gary

The United States Federal Reserve has officially launched its new instant payment system dubbed FedNow. 
The launch comes as the Federal Reserve looks to modernize and streamline the United States’ payment system. Research on financial systems has been ongoing since 2021 FedNow enables instant payment between users and banks and boasts of its 24/7/365 operations. Users will have full access to their funds and also do not have to pay anything to join the service. The Federal Reserve expects the service to speed up the flow of money throughout the country. 
According to the FedNow’s own website, the initial launch will simply focus on “core clearing and settlement capabilities” and additional features will be launched in phases, depending on industry demands and changes in technology. As more banks and credit unions adopt the service, users and businesses can expect more benefits. As of writing, early adopters of the service include big banks like JPMorgan Chase, Wells Fargo, and BNY Mellon. 
While this development is of course a net positive for everyday users, the launch of FedNow raises a glaring question, especially regarding the United States’ own financial system. There are already existing systems like Venmo, Paypal or even The Clearing House’s Real-Time Payments (RTP) Network that enable instant payments. So the question becomes what is FedNow really for? And what comes next after FedNow? 
Although the Federal Reserve has said that FedNow will not be used as a springboard to the launch of the United States’ own central bank digital currency (CBDC), this has not stopped the cryptocurrency community from speculating and worrying. If the Federal Reserve, and by extension the United States government, is serious about digital currencies, then it should also relax the current hostile environment to cryptocurrency enablked by none other than the Securities and Exchange Commission (SEC). 
The SEC, at the helm of Gary Gensler, has been on a warpath against cryptocurrency platforms with its unflinching stance that all crypto assets (save for Bitcoin) are securities. 
Notably, there is the recent issue of the BRICS (Brazil, Russia, India, China, South Africa) bloc developing its own CBDC patently as a rival to the U.S. dollar. The United States is currently at a crossroads and the next big move after FedNow will be crucial not just to the everyday user but the entire world’s monetary system. 
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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