Long-awaited Fed digital payments system to launch in July

The Federal Reserve’s digital payments system, which will debut in July, promises to help move money faster around the world.

FedNow is known to create “a leading payments system that is resilient, adaptable and accessible,” he said Richmond Fed President Tom Barkinwho is the executive sponsor of the program.

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According to the plan’s goals, the system will allow bill payments, remittances such as salaries and expenditures from the government, and many other consumer activities to happen more quickly and at lower cost.

Participants will complete the training and certification process in early April, according to the Fed’s announcement.

“As the launch looms, we urge financial institutions and their industry partners to put all their efforts into preparing to join the FedNow service,” said Boston Fed Program Executive and First Vice President Ken Montgomery, who helped lead the project.under Former Boston Fed President Eric Rosengren.

Institutions participating in the program will have 24-hour, 7-day access, rather than the current system, which is closed on weekends.

Advocates of the scheme say it will get money into people’s hands faster. For example, government payments like those issued in the early days of the pandemic should have been credited immediately, rather than the days it took for most, they said.

Some Fed officials say the program could even replace the need for central bank digital currency.