MNI POLICY: Fed To Launch Real-Time Payment System in 2023-24

By Evan Ryser

     WASHINGTON (MNI) - The Federal Reserve will launch a real-time payment

system in 2023-2024 capable of making transactions within the United States in

seconds

     The FedNow Service will initially be limited to transactions of no more

than $25,000, the Fed said, adding that it will explore how the new service will

be able to most effectively support the broader U.S. payment system.

     "FedNow will permit banks of every size in every community across the

country to provide real-time payments to their customers," Federal Reserve

Governor Lael Brainard said in prepared remarks in a Kansas City Town Hall. "We

are embracing a path that will bring transformative, rather than incremental,

change to the retail payment infrastructure in the United States."

     Brainard wants to move towards a national real-time payment network. The

Board will also consider the expansion of Fedwire Funds Service and National

Settlement Service hours to facilitate liquidity management in private-sector

real-time gross settlement services.

     This action comes as large banks, worried about a public sector rival, have

resisted U.S. government efforts on real-time payments.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

[TOPICS: MMUFE$,M$U$$$]