The Federal Reserve has announced that its instant payments system, which is seen as a substitute for central bank digital currencies (CBDCs) and stablecoins, will be launched in July 2023. The payment facility is expected to take seconds to complete payments and can back different transactions, but is not backed by blockchain. The Fed will reportedly begin the formal certification of participants during the first week of April 2023 to ensure the launch. Early adopters will complete a customer testing and certification program to prepare for sending live transactions through the system.
Expansion of Instant Payments Landscape
The Federal Reserve plans to add as many financial institutions as possible to expand the instant payments landscape, said Tom Barkin, president, Federal Reserve Bank of Richmond, and executive sponsor, FedNow Program, in the announcement. The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of the economy.
Also Read: Federal Reserve Bars Member Banks from Cryptocurrency Banking
Jerome Powell, Chair of the Federal Reserve, emphasized the possibility of a US CBDC at the House Financial Services Committee. Powell stated that the Federal Reserve is “carefully analyzing the potential benefits and costs of a CBDC, and engaging with the public and stakeholders on this important issue.”
