FedNow, the Federal Reserve’s upcoming instant payment system to be launched in July, will be integrated with the Metal Blockchain network as per the Metal Blockchain team’s announcement on May 11. By utilising FedNow’s “send/receive” function, Metal users can instantly convert their funds to stablecoins and vice versa, according to media reports.
Through its FedNow instant payment system, the Federal Reserve of the United States allows banks to process payments quickly at any time. PayPal, Venmo, and crypto wallets are currently the only apps that let Americans make instant payments domestically. As of now, it has been reported that the new service will launch in July.
Metal Blockchain is a cryptocurrency network developed by Metallicus to provide regulatory options for decentralised finance (DeFi) developers. The developers stated that the network had built-in identity verification and anti-money laundering features, and that it was “built on a foundation of BSA [Bank Secrecy Act] compliance”.
Developers are given the option to set rules for the exchange of assets through a sub-network called the ‘X-Chain’. For instance, the developer can set a regulation to restrict tokens being sent only to US citizens or for being traded until tomorrow.
The inclusion of Metal Blockchain with the FedNow service will enable, among other things, direct funding of digital wallets, allowing users to buy stable coins or convert them back to USD and transfer them in and out of DFIs using FedNow’s send and receive functionality. It ensures that transactions are processed efficiently and securely through its unique system and safety measures. This particular inclusion will also create an integrated “bank chain” system that is secure and doesn’t rely on oracles.
The integration, according to Marshall Hayner, CEO and co-founder of Metallicus, will also enable banks to prepare for a central bank digital currency in the future, as well as bank-issued stablecoins that can interact within a basket of stablecoin currencies. According to him, there is no basis for controversy surrounding CBDCs. In his view, CBDCs will also be subject to the same level of scrutiny as banks.
FedNow has been described as the beginning of a blockchain-based CBDC that could compromise privacy by certain American politicians. To answer the doubts, the Federal Reserve has denied all the allegations towards the connection between a central digital currency and the FedNow. It might be difficult to introduce a CBDC to the government with the already sceptical attitude of the public towards the blockchain industry.