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Federal Reserve Is Rushing to Get Its Instant Payments Offering Ready
COVID-19 proved the need for FedNow, even though the U.S. central bank admits the service is still years away.
By Danny Nelson
Updated Sep 14, 2021, 9:41 a.m. Published Aug 6, 2020, 6:03 p.m.
The Federal Reserve is bullish on technologies that aim to speed payments, and is now rushing to get its own platform, FedNow, up and running.
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- In a Thursday webinar, Federal Reserve Board Governor Lael Brainard said the U.S. central bank will debut its instant payment service "as soon as practically possible."
- COVID-19 showcased Americans' dire need of a "resilient instant payment system," Brainard said. FedNow aims to be the answer, even if it won't arrive until 2023 or 2024.
- FedNow, which the Federal Reserve is developing in response to private-sector, real-time, gross settlement initiatives, may play a key part in that future.
- "By creating that neutral platform, banks in partnership with these other companies will be able to offer much more innovation services, services that we may not even be imagining," Brainard said.
- In the meantime, the Federal Reserve "remains optimistic" that emerging payment technologies could benefit consumers at the retail payments level "when the appropriate safeguards are in place," she said.
- She also cited the impact of the Facebook-linked libra stablecoin, repeating her past assertion the global stablecoin project raises "fundamental questions" about private money regulation, legality and its potential economic implications.
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