The US Federal Reserve’s new instant payments infrastructure, called FedNow, has officially launched.
According to a recent press release, banks and credit unions can now log into the payment system to allow their customers to transfer funds instantly at any time of the day.
The Fed say on Twitter that the service is not related to any central bank digital currency (CBDC) and is not a step toward eliminating cash.
The Treasury Department’s Office of the Fiscal Service and 35 early adopting banks and credit unions already have instant payment capabilities through the FedNow infrastructure.
The Fed says it is “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.”
Separately from FedNow, the Biden administration is currently exploring the possibility of using CBDCs to issue digital dollars. Federal Reserve Chairman Jerome Powell said in testimony to the House Financial Services Committee in March that the Fed needs congressional approval to implement a digital currency.
Numerous politicians and figures in the crypto world have expressed concern that CBDCs could be used as tools of government surveillance and financial control.
Graham Steele, the U.S. Treasury Department’s assistant secretary for financial institutions, acknowledged in a speech last month that CBDCs pose significant user privacy challenges.
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