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- The Federal Reserve’s upcoming instant payment service, FedNow, will be linked to Metal Blockchain.
- Other claimed attributes of FedNow, such as its extremely cheap transaction fees, may pose a challenge to Ripple- or Stellar-like protocols.
According to an announcement by the Metal Blockchain team on May 11, the Federal Reserve’s upcoming instant payment service, FedNow, will be linked to Metal Blockchain. This integration will enable users of Metal to quickly convert funds to stablecoin and vice versa by utilizing FedNow’s “send/receive” feature.
The FedNow service’s partnership with Metal Blockchain for quick fiat and stablecoin conversion marks a major milestone in bridging the barrier between conventional banking and decentralized finance. At the moment, United States citizens can solely make instant payments within the country through third-party applications like Venmo and PayPal or digital wallets for cryptocurrencies.
The platform is undergoing a pilot phase, with over 120 organizations taking part, including recent additions such as U.S. Bank, Exchange Bank, and various payment processors and solution providers.
Ripple, a prominent provider of cross-border payments and open-source distributed ledger technology for financial transactions, may be included among the fintech companies that FedNow will utilize. Additionally, Stellar Lumens (XLM), a blockchain-based payment network that offers a quicker and more cost-effective method for executing global payments, might also be among the companies that FedNow will use.
As per a Metal Blockchain publication, conversations with financial institutions and fintech partners commenced in January. The team has identified several use cases, with a particular emphasis on the requirement for blockchain development resources.
Will The FedNow Be Ripple‘s and Stellar Lumens Rival
Following the announcement that FedNow will be launched in July. It has gained popularity and begun positioning itself as an alternative to numerous current cross-border payment systems. Such as payment systems like Ripple (XRP) and Stellar Lumens (XLM), as well as a number of stablecoins that make it possible for value to be transferred extremely quickly and cheaply compared to the conventional methods.
Unquestionably, the new payment method will be preferable to the current centralized system of payment. The latter has a cumbersome procedure that, even during business days, requires days to complete payments. Additionally, it is a problem because of the constrained banking hours in general. However, other claimed attributes of FedNow, such as its extremely cheap transaction fees, may pose a challenge to Ripple- or Stellar-like protocols.
