FedNow has caught the eyes of everyone in the international financial community including cryptocurrency enthusiasts. The new digital payments system is now live and the Federal Reserve has now authorized a limited amount of commercial enterprises to use it.
The latest declaration issued by the Federal Reserve reveals that the Central Bank has granted 57 commercial enterprises a license to use the new state-sanctioned payments channel. The official launch of the FedNow has been finalized to take place sometime in July.
However, thus far a final or official date for the launch is not issued yet. The financial enterprises that have received authorization from the Federal Reserve to use the digital payments platform include 41 banks and others.
There are about 11 private financial services companies including names like JP Morgan Chase, BNY Mellon, Wells Fargo, and US Bancorp that have completed the testing phase for FedNow. As soon as the service goes online, these licensed enterprises will be able to conduct digital payments using this channel.
The introduction and finalization of FedNow mark the start of a new chapter in the finance sector development for America.
Federal Reserve to Upgrade its Current Financial Payments Network with FedNow
Since the introduction of blockchains, many people have raised questions about the existing and antiquated banking payment networks. However, Federal Reserve is set to make big changes in the existing financial infrastructure of the country.
To this end, the central banking enterprise has introduced FedNow which is considered to be faster, cheaper, and more efficient. Fed has granted 57 companies licenses to utilize this payments network in the beginning phase.
The firms that have received a license from the Fed are chosen based on having suitable digital payment infrastructure, compatibility, and reliability to accommodate the new payments network.
On the other hand, the firms have indicated their eagerness to join the new payments network by signing up for the testing phase. At the same time, these firms are also determined to improve the experience of their consumers.
Some media reports suggest that these firms are determined to stay ahead in the financial sector in terms of offering their consumers the best and most advanced payment options. It is worth mentioning that the services of FedNow are not only limited to business-to-business transactions but they are also available for retail users.
If remain successful, it is possible that FedNow is adopted on a wider scale and changes the economic makeup of the country in the near term.
Fintech companies may start to take an interest in FedNow as an instrument of financial innovation. Many companies in the sector may work with the FedNow payments network to come up with new use cases and enhance the instant payment options that are available at the disposal of these firms that are noted by these organizations.
However, the Central Bank has not issued a final date for the FedNow payments network thus far. Nevertheless, the completion of the testing phase for the 41 banks and 15 private financial services providers has marked that the final date of the official launch is drawing nearer than ever before.
The financial ecosystem of the country has continued to enhance in the form of various blockchains, DAGs, and Web3 networks. During this crucial time, the Federal Reserve has made an important decision to launch a centralized and enhanced payments network.
This payments network is directed towards the betterment of the modernization of the US payments system. There is a strong chance that FedNow can become the face of the national payments network within the USA soon than later.
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