• The Federal Reserve has announced its intention to extend the FedNow program to encompass all 10,000 banks located in the United States. 

• CGI, Volante, one of Ripple’s integrated partners, is a key component of FedNow’s operation.

Fednow is a quick payment system developed by the federal reserve for U.S. banks. Once put into practice, it will make it possible for all financial institutions across the country to provide faster payment services. With the help of this service, payment processing times will be sped up to match the effectiveness of well-known payment tools like Venmo and Cash App.

Upon its launch, FedNow will eliminate most waiting periods associated with online payment clearance and check processing. This means that payers will have the ability to send funds on the designated day without any delays. Furthermore, the system is comparable to the Faster Payments system in the United Kingdom and the Single Euro Payments Area in the Eurozone.

What is the expected launch date?

The Federal Reserve has announced its intention to extend the FedNow program to encompass all 10,000 banks located in the United States. As of June 29, the Fed confirmed that 57 initial adopter entities, including financial institutions and service providers, have completed the formal testing and certification process.

These 57 early partners are currently undergoing final trial runs on the service. The anticipated launch of FedNow is scheduled for late July.

The central banking system lags behind private, more efficient payment systems that numerous major banks have adopted. Additionally, the Federal Reserve acknowledges the significant consumer desire for instant digital transactions. According to Fed Chairman Jerome Powell, “I think we can get this into the hands of the public very quickly, and I think we’ll have real-time payments in this country very soon.”

The development of FedNow has been underway for almost ten years. The Federal Reserve began exploring the idea of an instant payments network in 2013 and established the Faster Payments Task Force (FPTF) in 2015 to outline a strategic framework.

Following extensive discussions, the publication of multiple studies, and a phase of gathering public feedback, the Fed unveiled FedNow in August 2019. Since then, the Fed has conducted pilot programs with various financial institutions to test the system’s functionality.

Partnership with Ripple in Developing FedNow

As Crypto News Flash reported, ACI Worldwide, Volante Technologies, and Finastra, in collaboration with Ripple, have been actively engaged in developing FedNow, the instant payments system by the US Federal Reserve. Among these partners, Volante Technologies, a leading provider of cloud payment solutions, has been working closely with a prominent custodian bank to conduct pilot testing of the system successfully. 

During this phase, the two groups have extensively tested the ‘send,’ ‘receive,’ and ‘bank-to-bank’ transfer functionalities to assist banks in adapting to the upcoming network.

In addition to CGI, Volante, one of Ripple’s integrated partners, is a key component of FedNow’s operation and has attracted the attention of the Ripple community. According to certain claims, this partnership could benefit Ripple and XRP. Because of the interface with Ripple, Volante users could use XRP on their platform. Volante and Ripple have been actively working together to launch cutting-edge payment options.