In a groundbreaking development on May 11th, the team at Metal Blockchain revealed their connection with the Federal Reserve’s forthcoming instant payment service, FedNow. The fusion of these two systems is set to redefine instant transactions, by enabling Metal users to swiftly convert their funds into stablecoin and back via FedNow’s “send/receive” function.
FedNow, crafted by the United States Federal Reserve, serves as an instant payment platform that facilitates round-the-clock near-instant transactions between banks. Currently, U.S. citizens can only carry out instant payments domestically through third-party applications such as PayPal, Venmo, and crypto wallets. This innovative service is expected to go live this coming July.
FedNow service will integrate with Metal Blockchain for instant conversions between fiat and stablecoin. https://t.co/A6FpKSeAYX— Cointelegraph (@Cointelegraph) May 11, 2023
Metal Blockchain: Compliance-Friendly Platform for DeFi Developers
Metal Blockchain, a crypto network, is the brainchild of Metallicus. It’s built on a fork of Avalanche’s code, offering compliant options for decentralized finance (DeFi) developers. The platform claims to be constructed on the foundation of BSA (Bank Secrecy Act) Compliance, suggesting it’s equipped with Anti-Money Laundering features and identity verification.
Among its features, the network includes a subnet named “X-Chain” that allows developers to create rules for transferring assets. For instance, a token can be issued with the rule that it “can only be sent to US citizens” or “can’t be traded until tomorrow.” FedNow’s criteria for allowing integration remain unconfirmed, however, the inclusion of Metal as a FedNow service provider could be due to its compliance with the Bank Secrecy Act.
The new #MetalBlockchain brand identity stands out in the world of decentralized finance, reflecting a unique fusion of innovation, functionality, and exceptional design.— Metal Blockchain (@MetalBlockchain) April 17, 2023
Discover more about the distinctive visual design language in the blog below 👇https://t.co/rhTQlLERsB pic.twitter.com/VgFv1r7S9b
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Interconnected Bank Chains and the Prospects of CBDCs
Marshall Hayner, Metallicus co-founder and CEO, during a discussion with Cointelegraph, shared his vision of interconnected “bank chains” facilitated by Metal’s link to FedNow. This could give rise to a more extensive blockchain ecosystem that is secure and independent of oracles, allowing banks to process payments, handle settlements, and stay connected to the FedNow system.
Hayner also shared his thoughts on the potential for banks to gear up for an eventual central bank digital currency (CBDC), and “bank-issued stablecoins that can interact within a basket of stablecoin currencies.” Despite criticisms from some U.S. politicians who claim FedNow could pave the way for a blockchain-based CBDC, infringing on privacy, the Federal Reserve has refuted any connection between FedNow and a CBDC.
Hayner echoed this sentiment, dismissing the criticisms of CBDCs as unfounded. He stated, “the same rigor that is applied to the banking system will be applied to CBDC.”
This collaboration between Federal Reserve’s FedNow and Metal Blockchain signifies a substantial leap in the evolution of financial transactions, pushing the boundaries of what’s possible in the world of instant payments and DeFi. As we move forward, these advancements may well become the norm, propelling us into a new era of financial operations.
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In conclusion, the integration of Federal Reserve’s FedNow with Metal Blockchain is a groundbreaking move that sets a new precedent in the landscape of instant payments and decentralized finance. This connection could potentially pave the way for a more secure and interconnected blockchain ecosystem, and lays the groundwork for the future adoption of central bank digital currencies. As we advance, this fusion of traditional banking systems with cutting-edge blockchain technology might just become the new standard for financial transactions worldwide.
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Frequently Asked Questions
What is FedNow?
FedNow is an instant payment system developed by the United States Federal Reserve that allows for round-the-clock, near-instant transactions between banks.
Who created Metal Blockchain?
Metal Blockchain is a crypto network developed by Metallicus, designed to provide compliance-friendly options for decentralized finance (DeFi) developers.
How does the integration work?
The integration allows Metal users to instantly convert their funds to stablecoin and vice versa using FedNow's "send/receive" function.
Are CBDCs related to FedNow?
The Federal Reserve has denied any connection between FedNow and a central bank digital currency (CBDC).
When will FedNow launch?
The Federal Reserve has stated that the new instant payment service, FedNow, will launch in July.