**US Launches FedNow Instant Payment Service, Challenging CBDCs and Blockchain Solutions**
**Introduction**
Last updated Jul 21, 2023
The US Federal Reserve has officially launched the FedNow Instant payment service, prompting discussions about the need for central bank digital currencies (CBDCs) and blockchain-powered payment solutions.
**FedNow: A New Digital Payment System**
FedNow is a technology-based digital payment system that was slated to launch in July 2023.
On July 20, 2023, the US Federal Reserve opened the FedNow payment service for citizens and banks to utilize. Currently, 35 banks and credit unions are participating in the early phase, including major institutions like JPMorgan Chase and Wells Fargo.
**Instant Access to Paychecks and Invoices**
The US Fed has announced that FedNow will provide just-in-time access to paychecks and invoices, aiming to make this digital payment service as fast as possible.
Early phase users have reported that FedNow is a smooth payment system compared to traditional systems, which often take a significant amount of time to complete transactions. Fed chairman Jeremy Powell expressed the central bank’s goal to continuously improve FedNow to ensure its convenience and usability in daily life.
**FedNow vs. Crypto Payment Services and CBDCs**
Experts have observed that the FedNow payment system challenges both the crypto payment services as well as the need for CBDCs. FedNow offers faster and better payment solutions, making it a strong contender against alternative payment methods.
Although there were initial speculations that FedNow would integrate CBDC services, the US Fed has officially confirmed that they have no plans for such integration. This decision has sparked a debate on whether America should focus on enhancing its study and development of CBDCs, also known as the Digital Dollar.
**Response from Charles Hoskinson, Cardano Founder**
Cardano founder Charles Hoskinson has acknowledged the significant traction that FedNow has gained among Americans, indicating its popularity and potential impact on existing payment systems.
**Conclusion**
The launch of the FedNow Instant payment service in the US has generated discussions on the necessity of CBDCs and blockchain-powered payment solutions. With its aim to provide faster and more efficient payment options, FedNow poses a challenge to crypto payment services and may influence the future direction of digital payments in the country.
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