FEDNOW, the real-time gross settlement system from the Federal Reserve, has been formally introduced in the US now and started with domestic transactions only. This accomplishment represents a significant advancement in the nation’s payment system. And this might bring good news for Ripple as Volante Technologies, a Ripple client and one of the pioneers in the field of cloud-based payments and financial communications, has contributed to the development of the FedNow service.

Officially Live On Domestic Transactions

FEDNOW’s deployment promises to offer individuals and businesses across the country quicker and more effective payment processing. To ensure a flawless and error-free live environment, the decision was made to initially restrict its activities to domestic transactions.

The introduction of FEDNOW has been eagerly anticipated, and its successful implementation is regarded as a crucial first step toward modernizing the U.S. payment system. The new technology runs in real-time, making it possible to send funds instantly between banks, speed up settlements, and improve overall financial efficiency.

First vice president of the Federal Reserve Bank of Boston and FedNow program leader Ken Montgomery recommended further involvement from the financial institutions. Global figures indicate that the ecosystem for quick payments was worth $100 trillion in 2021. Additionally, Asian nations like China and India are dominating the market, with the United States joining the group somewhat later.

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How Will This Affect Ripple?

Ripple is witnessing a good month and with this news, the upward trajectory is only expected to continue. Note that this is not the first time that a Ripple partner has joined the Fed for the FedNow payments development. 

The FedNow has been actively developed by Ripple partners ACI Worldwide, Volante Technologies, and Finastra. The system’s piloting phase was completed thanks to Volante Technologies, the partner with the most experience in cloud payments. To assist banks in adjusting to the new network, the two groups evaluated the “send,” “receive,” and “bank-to-bank” transfer functionalities. 

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