The United States Federal Reserve has confirmed a July launch date for its long-awaited instant payments system, seen by many as a gateway to central bank digital currencies and stablecoins.
The instant payment network will settle payments in seconds and can support transactions between consumers, merchants and banks. It does not rely on blockchain technology.
It’s a significant step for the government, as it is controlled by the Federal Reserve. Clearing House’s RTP network, which also offers real-time payments, is operated by a consortium of large banks.
According to a March 15 announcement, the U.S. Fed said the debut of FedNow is set for July, with the U.S. Treasury and a “diverse mix of financial institutions of all sizes” ready to use the network from launch.
The Fed said it will “begin the formal certification of participants” during the first week of April in preparation for the launch.
“Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system,” the announcement reads.
FedNow could also stand in place of a central-bank-issued digital currency.
Federal Reserve Vice Chair Lael Brainard emphasised during a House of Representatives Committee on Financial Services hearing in May that a CBDC would take far longer to get off the ground than FedNow due to regulatory hurdles.
“[If] Congress were to decide… to issue a central bank digital currency, it could take five years to put in place the requisite security features, the design features,” she said.
She added that FedNow will serve many of the same functions as a CBDC anyhow.
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