{"id":5414,"date":"2023-06-06T10:37:45","date_gmt":"2023-06-06T14:37:45","guid":{"rendered":"http:\/\/leadingcryptonews.com\/how-the-us-federal-reserve-wants-to-compete-with-crypto\/"},"modified":"2023-06-06T10:37:45","modified_gmt":"2023-06-06T14:37:45","slug":"how-the-us-federal-reserve-wants-to-compete-with-crypto","status":"publish","type":"post","link":"https:\/\/leadingcryptonews.com\/how-the-us-federal-reserve-wants-to-compete-with-crypto\/","title":{"rendered":"How the US Federal Reserve Wants to Compete With Crypto"},"content":{"rendered":"
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Banking and money transfers in the United States can often be a painstakingly slow process. Unlike in many countries where the transfer of funds can occur instantaneously, moving money between US accounts can take days. However, the US Federal Reserve appears to be aware of this and plans to compete with crypto. <\/strong><\/p>\n The Fed has developed FedNow, a high-speed transportation lane that could potentially revolutionize the banking industry, allowing bank transfers to occur within seconds just like cryptocurrencies.<\/p>\n The Federal Reserve has recognized the need to evolve to stay relevant in a world where financial transactions can be executed instantly with cryptos. Launched in July, FedNow aims to revolutionize the American banking system. Until now, it has been notoriously slow, often taking days for funds to be transferred between accounts. <\/p>\n Although digital platforms like PayPal\u2019s Venmo and Block Inc.\u2019s Cash App offer quick workarounds, they merely mask the slow mechanics of the traditional banking system. <\/p>\n FedNow aims to cut through this red tape. It wants to facilitate instant bank transfers and finally bring the US banking system up to speed with countries that already offer near-instant bank payments.<\/p>\n The Automated Clearing House (ACH) has been the traditional method of transfer for decades. This system lumps transactions together, processing them at intervals that can take days to complete. <\/p>\n This slow pace has often resulted in consumers abandoning financial transactions due to their lengthy processing times. Additionally, it has been especially costly for those living paycheck to paycheck who face late fees or overdraft penalties.<\/p>\n One question many might ask is why have not banks already solved this problem? The short answer is they have had little incentive to do so. <\/p>\n With income derived from overdraft fees and the ability to earn yields from short-term securities, speeding up the process was not a priority. <\/p>\nUS Federal Reserve to Speed Up the Traditional Banking System<\/h2>\n
FedNow: Is It a Game-Changer?<\/h2>\n