The U.S. Federal Reserve's forthcoming instant payment service, FedNow, will be integrated with the Metal Blockchain network. The network was created by Metallicus to offer compliance-friendly options for decentralized finance (DeFi) developers. The announcement was made on May 11 and allows Metal users to instantly convert funds to stablecoin and back again using FedNow's “send/receive” function.

The new service will launch in July and will allow U.S. citizens to make instant payments domestically. FedNow’s promises increased safety, speed, and ease of use, compared to third-party apps such as PayPal and Venmo or crypto wallets. The integration with Metal Blockchain will provide additional features for FedNow. Metal’s documents state that its network features a subnet called “X-Chain” that can implement rules to transfer assets. Examples of these rules include that a token can only be sent to US citizens or can’t be traded until tomorrow. This could prove useful in terms of the Bank Secrecy Act compliance.

The integration of Metal Network with FedNow has been deemed controversial by some politicians, including Florida Governor Ron DeSantis and U.S. Presidential candidate Robert Kennedy, Jr., who believe it is the first step towards a blockchain-based central bank digital currency (CBDC). This currency, which would infringe privacy rights, is denied by the Federal Reserve. However, Metallicus CEO, Marshall Hayner, has stated his belief that, as the same rigor that is applied to the banking system will be applied to CBDC, the controversy is unfounded.

He further suggested that the integration of Metal Network with FedNow could help form interconnected “bank chains”, creating a larger blockchain ecosystem secure and not relying on oracles. This would in turn allow banks to process payments and handle settlements while staying connected to the FedNow system. Furthermore, banks could be prepared to use bank-issued stablecoins and a CBDC, which could move within a basket of stablecoin currencies.

In conclusion, the Federal Reserve's upcoming service FedNow will open for launch in July and will be integrated with Metal Blockchain. This integration will provide an additional level of security for end users and could potentially help create interconnected “bank chains” and a larger blockchain ecosystem. Although there has been some criticism against FedNow’s integration with Metal Blockchain and the potential for a central bank digital currency, CEO Marshall Hayner believes the controversy is unfounded.



Other News from Today