“A joint research effort between the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology into the technical feasibility of a potential central bank digital currency is now complete. The Boston Fed’s work on CBDC with MIT’s Digital Currency Initiative is known as Project Hamilton. Boston Fed Executive Vice President Jim Cunha said the now-concluded project was “agnostic” from the start about any future policy decisions regarding new technologies and U.S. currency.”

“In preparation for the mid-2023 FedNow Service launch, the Federal Reserve has formed an industry working group to establish voluntary principles for a consistent end-customer experience for solutions leveraging FedNow Service request for payment (RFP) functionality, and to consider other practices or standards that may be useful to encourage broad adoption of RFP functionality across the industry. RFP will be one of the key features of the FedNow Service. It will allow financial institutions and service providers to build bill pay solutions that can help consumers and businesses conveniently send invoices, receive instant bill payments and better manage cash flow. The working group, composed of nearly 100 FedNow Community members (PDF) , will meet monthly between Q4 2022 and the second half of 2023 to outline recommended payer and payee experiences for business and consumers, and provide input on practices for the Federal Reserve to consider. The working group will also produce an “RFP Customer Experience” document that will be publicly available.”

“Central banks around the world have made massive investments into CBDC’s research. The FED, despite lagging behind other peers in the race, has sharply ramped up efforts to issue its CBDC in recent times. The Federal Reserve Bank of New York has completed a successful pilot of the use of central bank digital currencies (CBDCs) for wholesale, cross-border transactions. The experiment, also known as Project Cedar: Phase One, aims to explore the capabilities of blockchain technology in payment delivery and the application of CBDC in wholesale payments. Conducted on separate blockchains to explore the capabilities of blockchain technology in delivering fast and safe payments for a lower settlement cost, the FED is now taking blockchain seriously.”

The Federal Reserve Board on Thursday announced pricing, effective January 3, 2023, for payment services the Federal Reserve Banks provide to depository institutions, such as the clearing of checks, ACH transactions, and wholesale payment and settlement services…The Board also announced the 2023 pricing for the FedNow^SM Service, a real-time payments platform, which is targeted to launch between May and July next year. The pricing is substantially similar to the anticipated pricing announced on January 27, 2022.

“The Federal Reserve Board on Monday finalized updates to the Board’s rule concerning debit card transactions. Pursuant to statute, the updates specify that debit card issuers should enable at least two payment card networks to process all debit card transactions, including “card-not-present” transactions, such as online payments. 1 The final rule is substantially similar to the proposal issued last year. By law, the Board is required to make rules ensuring that debit card issuers give merchants the opportunity to choose between at least two unaffiliated networks when routing debit card transactions. When the Board initially issued the rule in July 2011, the market had not developed solutions to broadly support multiple networks for card-not-present debit card transactions. Since that time, technology has evolved to address these barriers. However, some debit card issuers have not yet enabled at least two unaffiliated networks for merchants to choose between when routing such transactions. This issue has become increasingly pronounced because of continued growth in online payments.”

“Federal Reserve Financial Services today launched the FedPayments® Insights Service, a business and analytics tool that generates reports on a financial institution’s payments settled through the FedACH Service to help the organization advance its business strategy and day-to-day ACH operations. “In recent years, ACH transactions have grown in both volume and total value,” said Keith Melton, senior vice president and head of product management, Federal Reserve Financial Services. “As a result, it’s more important than ever before for financial institutions to analyze their ACH payment trends to help inform operational, risk management and strategic decisions. The FedPayments Insights Service provides a comprehensive, easy-to-access view of an institution’s daily and historical FedACH activity, including government and commercial transactions.””

“The Federal Reserve Banks have narrowed the timing of the FedNow Service launch to mid-year 2023, specifically targeting a production rollout of the service in the May to July timeframe. This further defines the previously communicated 2023 launch window for the anticipated instant payments service and comes as the FedNow Pilot Program prepares to enter technical testing for the service starting in September. “Today, with the FedNow launch date in sight, we are pleased with the collaboration and dedication our pilot participants have brought to advance modern payments in America,” said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program. Currently, more than 120 organizations are participating in the FedNow Pilot Program. Recent newcomers include U.S. Bank, Exchange Bank, and several payment processors and solution providers, including Alacriti Payments LLC, ECS Fin Inc., Form3 and ModusBox, Inc.”

“The Federal Reserve Board on Monday announced final guidelines that could open up a path for institutions peddling new types of financial products, or those with novel charters, to tap into the banking system. Why it matters: The guidelines seek to clarify a longstanding question critical to the crypto industry — who is allowed to have a master account. Such accounts would allow crypto banks and fintech platforms to access the central bank’s rails (payments and services) without partnering with a traditional bank.”

“The Federal Reserve today announced the addition of several organizations to the FedNow Service Pilot Program. The participants are joining more than 120 other organizations amid the program’s testing phase, which began earlier this year and will continue through the launch of the FedNow Service in 2023. The new pilot participants include the U.S. Department of the Treasury’s Bureau of the Fiscal Service, Exchange Bank, and several payment processors and solution providers, including Alacriti Payments LLC, ECS Fin Inc., Form3 and ModusBox, Inc.”

“A bipartisan group of US lawmakers wants the Federal Reserve to get more serious about issuing a digital dollar to compete with rivals like China’s digital yuan. Democrat Rep. Maxine Waters has drafted legislation that aims for the Fed to further study the prospect of a digital dollar and design a route for it to come to fruition, The Wall Street Journal reported.  It comes after Waters, who is chair of the House Financial Services Committee, called the area of central bank digital currencies “a new digital assets space race.” Another supporter of the digital-dollar effort, Republican Rep. French Hill, cited China’s creation of a digital yuan in 2020 as a concern, noting Beijing’s lending around the world could aid its adoption and threaten the dollar’s dominance.”