FedNow Service
The Federal Reserve has launched a new payment service called FedNow that allows banks and credit unions to transfer funds for their customers . It is not related to a digital currency, nor is it a step towards eliminating any form of payment, including cash. The Federal Reserve has made no decision on issuing a central bank digital currency (CBDC) and would only proceed with the issuance of a CBDC with an authorizing law.
Ralph Fontones
10/10/20231 min read
The Federal Reserve has launched a new payment service called FedNow that allows banks and credit unions to transfer funds for their customers . It is not related to a digital currency, nor is it a step towards eliminating any form of payment, including cash. The Federal Reserve has made no decision on issuing a central bank digital currency (CBDC) and would only proceed with the issuance of a CBDC with an authorizing law.
In general, a CBDC is defined as a digital liability of a central bank that is widely available to the general public. However, in the United States, Federal Reserve notes (i.e., physical currency) are the only type of central bank money available to the general public.
The Federal Reserve Banks have narrowed the timing of the FedNow Service launch to mid-year 2023, specifically targeting a production rollout of the service in the May to July timeframe. The service is expected to operate on a 24-hour, 365-days-a-year basis .The FedNow Service 2023 Fee Schedule is available on the Federal Reserve Financial Services website. It provides information on FedNow service, billing codes, and fees.
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