It has been a full year since Protos covered the anticlimactic July 2023 launch of FedNow, the US Federal Reserve’s once-heralded 24/7 instant payments platform and ‘crypto killer.’
Needless to say — and despite a 12% overnight loss after a crisis in Japan — FedNow hasn’t killed crypto. Since the service launched, the total market capitalization of crypto has now rallied 59%.
Although the Fed never specifically claimed the service would disrupt anything in the crypto industry, its value propositions overlapped point-by-point with value propositions of blockchains. Specifically, marketing materials promoted FedNow’s 24/7/365 uptime, payment irreversibility, high throughput, zero chargebacks, and ultra-low fees even for large payments.
FedNow might be better than, but did not displace, most crypto assets
At the time, analysts thought the service would decisively disrupt the crypto industry, displacing stablecoins and attracting hundreds of millions of users. FedNow’s transaction fee rivals the most popular blockchains at just $0.23 per transaction, regardless of the size.
Initially, the XRP community latched onto FedNow, thinking that the launch would somehow benefit Ripple’s blockchain. For years, fans marketed XRP Ledger in particular as an interbank transfer and remittance-friendly blockchain.
Nevertheless, XRP has lost a quarter of its value since FedNow’s debut.
Read more: ‘Crypto killer’ FedNow launches, fails to kill crypto
Current statistics indicate that FedNow has onboarded over 900 financial institutions during its first 12 months. However, the Fed has certified only 32 organizations to support payment processing for them.
Mark Gould, chief executive payments officer of Federal Reserve Financial Services admitted, “We’re still early on the road to instant payment ubiquity.”