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.
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.
- 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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