- The Federal Reserve has chosen Metal Blockchain to power its payment service known as FedNow
- FedNow is scheduled to go live in July and will allow users to instantly send and receive funds
- Metal Blockchain CEO believes the integration provides a foundation for a central bank digital currency
The Federal Reserve has settled on Metal Blockchain as the engine for its payment service known as FedNow. Scheduled to go live in July, the service will allow users on the blockchain platform to instantly send and receive funds. According to Metal Blockchain creator Metallicus’ CEO Marshall Hayner, the launch of FedNow on the decentralized platform will provide a foundation for a Central Bank Digital Currency (CBDC).
Bringing Regulatory Compliance to the DeFi World
Metal Blockchain, which uses Avalanche’s base code, focuses on bringing regulatory compliance to developers in the decentralized finance (DeFi) space. According to the platform’s developers, the network complies with the Bank Secrecy Act meaning that it has KYC and AML features included by default.
According to Hayner, having FedNow on the network can help create a web of financial institutions thus eliminating the use of oracles when interacting with different banks which also boosts the network’s security.
Hayner also believes that having FedNow on Metal will help banks prepare for the arrival of a CBDC and enable financial institutions to interact with other stablecoins.
U.S Lawmakers Don’t Want the Fed in Control
Although the Federal Reserve has previously warned that digital currencies are a threat to the dominance of the U.S. dollar, it believes that a CBDC could help increase welfare in the United States. However, some U.S. lawmakers have a different view of CBDCs.
Florida Governor Ron DeSantis, for example, thinks that a CBDC will put Americans’ data privacy at risk. Others like Texas Senator Ted Cruz have filed legislation seeking to stop the Federal Reserve from being in charge of the country’s CBDC project.
With the Federal Reserve turning to blockchain, it may influence central banks around the world to unveil blockchain-based financial solutions focusing on the general public.