The new instant payment infrastructure of the U.S. Federal Reserve, called FedNow, has officially been launched.
Banks and credit unions can now sign up with the payments system to enable instant money transfers for their customers at any hour of the day, according to a recent press release.
The Fed says on Twitter that the service is not related to a central bank digital currency (CBDC) and is not a step towards eliminating cash.
The Treasury Department’s Bureau of the Fiscal Service and 35 early-adopting banks and credit unions already have instant payment capabilities via the FedNow infrastructure.
The Fed says it’s “committed to working with the more than 9,000 banks and credit unions across the country to support the widespread availability of this service for their customers over time.”
Separate from FedNow, the Biden Administration is currently exploring the possibility of using CBDCs to issue digital dollars. Federal Reserve Chair Jerome Powell said in testimony to the House Financial Services Committee in March that the Fed would require Congressional approval to implement a digital currency.
Numerous politicians and figures in the crypto world have expressed concerns that CBDCs could be used as instruments for government surveillance and financial control.
Graham Steele, the US Treasury’s Assistant Secretary for Financial Institutions, acknowledged in a speech last month that CBDCs present significant user privacy challenges.
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