The new payments system will allow faster payments of bills, paychecks and other transfers around-the-clock instead of days.
See related article: Fed issues guidelines for crypto banks to enter central banking system
- The U.S. Federal Reserve expects to launch the payments system between May and July of 2023, after a testing phase beginning next month.
- That timeline is subject to how fast financial services providers can make the necessary investments to upgrade payments infrastructure, vice chair Lael Brainard said in a speech on Monday.
- The Fed-backed Automated Clearing House system, which began operating in the 1970s, handled US$73 trillion across more than 29 billion payments last year, Fed data showed.
- The Fed’s new payments system will compete with privately-held The Clearing House, which was launched by a consortium of large banks in 2017. It processed 41.2 million transactions valued at about US$18 billion in the second quarter.
See related article: Bitcoin, Ether recover as Fed guidance reduces policy uncertainty