FedNow

FedNow is a service developed by the Federal Reserve for depository institutions in the United States. It will enable individuals and businesses to send and receive instant payments.[1][2][3][4] Banks will be able to build products on top of the FedNow platform.[5]

FedNow is scheduled to begin formal certification of participants of the program in April 2023, with a formal launch planned for July 2023.[6][7] It will operate on a 24-hour, 365-days-a-year basis,[8] as opposed to the U.S. government's current system that is closed on weekends and holidays.[9][10] FedNow's transaction costs are expected to be five times less-expensive than existing payment solutions, which cost merchants an average of $0.23 per transaction.[5]

Instant payments address most of the problems that a central bank digital currency (CBDC) would solve.[11][12] However, FedNow is not a CBDC, because it is not a liability of the Federal government.[13][5]

References
  1. "Federal Reserve Board - FedNow Service". Board of Governors of the Federal Reserve System. 2022-09-02. Retrieved 2022-09-23.
  2. "Analysis | The Fed's Messaging Needs an Upgrade". Editorial. Washington Post. 2022-09-01. ISSN 0190-8286. Retrieved 2022-11-21.
  3. Duncan, Hannah (2022-10-14). "Fed(up)Now? Instant payments in the US finally on their way". The Banker. Retrieved 2022-11-21.
  4. Smialek, Jeanna (2019-08-05). "Fed Wants Workers to Get Pay Faster". New York Times.
  5. Dale, Brady (2022-08-29). "The Fed gives a timeline for FedNow, its payments platform". Axios. Retrieved 2022-11-21.
  6. Campbell, Kyle (2022-11-03). "Fed sets prices that banks will pay for FedNow". American Banker. Retrieved 2022-11-21.
  7. "Federal Reserve announces July launch for the FedNow Service". Board of Governors of the Federal Reserve System. 2023-03-15. Archived from the original on 2023-03-16. Retrieved 2023-03-17.
  8. George, Esther L. (2020-12-18). "From Then to FedNow: Payments Innovation and the Federal Reserve". Policy Perspectives (December): 1–3.
  9. Barnett, Keith J.; Lui-Kwan, Kalama M.; Ostroff, Ethan G.; McCrory, Carlin A. (2022-09-06). "FedNow Set for 2023 Summer Launch". Lexology. Retrieved 2022-11-21.
  10. Neal, Michelle (2022-11-04). "Advances in Digital Currency Experimentation". Federal Reserve Bank of New York. Retrieved 2022-11-21.
  11. DiCamillo, Nate (2022-01-25). "The Fed's CBDC report was lame on purpose". Quartz. Retrieved 2022-11-21.
  12. Heltman, John (2019-11-25). "FedNow is necessary, Fed digital currency is not: Mester". American Banker. Retrieved 2022-11-21.
  13. Dale, Brady (2022-09-16). "The Feds want dollars to move much faster". Axios. Retrieved 2022-11-21.
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