Yesterday the U.S. Federal Reserve Board
announced that Federal Reserve Banks will develop a 24/7 real-time payment and settlement system called FedNow. But the launch date will be in 2023 or 2024. At last week’s Senate Banking Committee hearing about the regulation of digital assets, a significant proportion of time was spent addressing how to help the unbanked and underbanked.
At the
hearings, Professor Baradaran from the Irvine School of Law was a vocal proponent of a real-time system to address the needs of the underbanked. She argued that this approach meets their needs better compared to digital assets. And the lack of such a real-time system means paychecks take too long to clear, resulting in overdrafts and a greater need for payday loans.
Senator Brown, the ranking Democrat member on the Committee on Banking, Housing, and Urban Affairs, has also backed a bill introduced by the Democrats to try to encourage the Federal Reserve down the path.
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