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<\/p>\nThe Federal Reserve\u2019s forthcoming instant payment service FedNow will be integrated with Metal Blockchain, according to a May 11 announcement from the Metal Blockchain team. The announcement said that the integration will allow Metal users to instantly convert funds to stablecoin and back again using FedNow\u2019s \u201csend\/receive\u201d function.<\/p>\n
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FedNow is an instant payment system developed by the United States Federal Reserve. It allows for round-the-clock, near-instant payments between banks. Currently, U.S. residents can only make instant payments domestically through third-party apps such as PayPal and Venmo, or crypto wallets. The Federal Reserve has stated that the new service\u00a0will launch in July.<\/p>\n
Metal Blockchain is a crypto network developed by Metallicus, based on a fork of Avalanche’s code. It was created to offer compliance-friendly options for decentralized finance (DeFi) developers. In the May 11 announcement, Metal developers claimed that the network is \u201cbuilt on the foundation of BSA [Bank Secrecy Act] Compliance,\u201d implying that it has identity verification and Anti-Money Laundering features built in. <\/p>\n
According to its documents, the network features a subnet called \u201cX-Chain\u201d that allows developers to enact rules for transferring assets. For example, a token can be issued with the rule that it \u201ccan only be sent to US citizens\u201d or \u201ccan\u2019t be traded until tomorrow.\u201d<\/p>\n
Cointelegraph couldn’t verify what criteria FedNow will use for integration with the payment system. However, most blockchain networks use pseudonymous addresses as user identities, which means that they could be seen as not complying with the Bank Secrecy Act. This may explain why Metal is one of the first blockchain networks to be listed as a FedNow service provider.<\/p>\n
In a conversation with Cointelegraph, Metallicus co-founder and CEO Marshall Hayner said Metal’s integration with FedNow could enable the formation of interconnected \u201cbank chains,\u201d creating a larger blockchain ecosystem that is secure and does not rely on oracles. This will allow banks to communicate with each other to process payments and handle settlements while staying connected to the FedNow system.\u00a0<\/p>\n
He stated that the integration will also allow banks to prepare for an eventual central bank digital currency (CBDC), as well as for \u201cbank issued stablecoins that can interact within a basket of stablecoin currencies.\u201d<\/p>\n