In an interesting development, the United States Federal Reserve has announced that it will launch a real time payments and settlements system. The press release by the Board of Governors of the Federal Reserve states that Federal Reserve Banks will launch a new system called FedNow in a bid to upgrade the payments infrastructure system of the country.
Not many details are available on the technicalities of the system though. Many countries in the world are testing new payments systems to enhance their current systems, and even Visa and MasterCard are getting into the blockchain game. It’s clear that there is some threat from the crypto industry, which has thrown a total curve ball at financial institutions.
The announcement from the Fed Reserve has drawn some predictable reactions from the cryptocommunity. Most are pointing to the fact that an effective payments systems with all of the touted benefits already exist - like Bitcoin and Ripple. Even Anthony Pompliano has made a response saying that Bitcoin already exists and has proven its resilience.
However, without any details about how the system will work, there’s no way to compare it to existing crypto networks which already offer drastically reduced transaction fees, time and performance.
There have also been rumors about China launching a digital currency, which I wonder might be a reason for US authorities showing more interest in blockchain tech recently. As for creating an effective payment network between banks, Ripple is already on that and it’s got over 200 banks all over the world on its RippleNet, and these banks have regularly said that transactions only take a few seconds. That is incredible and that is something that the US Federal Reserve might be observing.
At any rate, US authorities are ramping up their examination of the crypto space, which is a good thing for the most part.