Federal Reserve's FedNow payments system will be live within a year, says Brainard

Quick Take

The Federal Reserve is readying its new instant payments service for launch between May and July of next year.
The FedNow service aims to resolve the lag in payments time between US financial institutions.

The Federal Reserve is getting closer to delivering its much-anticipated instant payments system, FedNow.

In a virtual speech on August 29, Fed Vice Chair Lael Brainard announced: "We will be ready to launch the FedNow Service between May and July of 2023, bringing this innovative core instant payment infrastructure to financial institutions of every size across America."

As currently envisioned, the FedNow service will provide real-time, 24/7 access to payments for financial insitutions of any size.

Source: Federal Reserve

FedNow appears in many conversations alongside a potential Fed central bank digital currency or CBDC. A Fed governor recently came out in support of FedNow as opposed to a US-centric CBDC.

In her first appearance before Congress, Brainard herself fielded a barrage of questions about a potential CBDC from concerned Republicans looking to establish that the Fed lacked statutory authority to issue a digital dollar without congressional approval. It's a subject about which several agencies, including the Fed, the Treasury, and the Department of Justice are supposed to report to President Biden by next week, per the executive order earlier this year.