> The true web3 players will be traditional finance companies upgrading their settlement systems.
That happens in the US this month, but it has nothing to do with crypto. The Federal Reserve System is launching FedNow, a 24/7 instant settlement system which obsoletes middlemen such as Zelle, Paypal, and Venmo. This is like Pix in Brazil, SEPA in the EU, WePay in China, etc. - a fast payment system run by banks and settled through central banks.
It's much like FedWire, but faster, cheaper, and for smaller amounts. You buy houses with FedWire; you buy dinner with FedNow. It's an inter-bank system, like Visa; you have to have an account with a bank to use it. Chase and Wells Fargo are on board, but Bank of America is not.
This will bring the US up to date with the other countries that have national payment systems.
Anybody in the US involved in moving money around needs to get up to speed on FedNow. Fast.
The Fed will charge banks a fee of $0.045 per transaction.[1]
Transactions take a few seconds. They must finish within 20 seconds or they time out, and they're expected to take much less time. Here's a technical overview.[2]
The bank to Fed to bank API uses IBM MQ and ISO 20022. These are a bit dated but widely used in the financial sector. Down at the bottom, it's XML.
Thank you for posting the actual technical pdf, that was interesting reading
> Certificate-Based Authentication
Heh, so I can look forward to the biennial banking outage as they forget to renew their certs :-D
But in seriousness, I have some experience with x509 auth from the early days of kubernetes using it and unless the system has some robust CRL mechanisms I look forward to knowing how such a scheme will deauthorize users
Interestingly, they also seem to be doing belt-and-suspenders since the messages themselves are signed with the private key of the institution, which appears to be registered out of band from the system itself
Dated?! By banking tech standards, ISO 20022 is futuristic magic, a mere decade old. A lot of banks (particularly in the US) would still be using ISO 15022 or even older standards.
Which crypto? Where can I pay with it? What if I don't want to have a hardware wallet everywhere with me? Can I cancel transactions and get my money back? Does it use more energy per year than Argentina?
A completely reasonable reply. There’s a lot of good tech around, it’s definitely better than HN’s 2017-era crypto knowledge, but it’s not evenly distributed at all. I agree the proof will be in a decade.
Personally I jumped into Linux when it was a joke and everyone used Solaris, Python when it was a joke and everyone used Perl, and virtualisation when nobody would ever use it outside testing. I know I’m early in crypto. I hope it will work out but there’s no guarantees on anything.
You mean Solana which has to take its network offline every two weeks or so [1] because it can't cope with yet another error/ddos/misconfiguration/what not?
It is like ACH, but it settles in seconds, rather than in hours.
The current "same day" ACH schedule is that payments that make into the day's batch must be received at the Fed by 4:45 p.m. ET, a target file distribution time of 5:30 p.m. ET, and a settlement time of 6:00 p.m. ET. It's all batch files.
Anything that re-bills periodically will remain on ACH. ACH handles requests to debit someone else's account with ACH, and they can undo that later. That runs on a 3-day cycle. FedNow has to be initiated from the money sender end.
Yeah, except for the fact that regular people will actually be able to use it to buy potatoes using a real currency, not a "currency" that's more volatile than tulip bulbs were in the 1600s.
Right now, probably nowhere, it's just being introduced.
Afterwards, if it's anything like SEPA, aside from my joke "bag of potatoes" comment, everywhere. In Europe you can make SEPA or SEPA backed transfers almost everywhere.
That happens in the US this month, but it has nothing to do with crypto. The Federal Reserve System is launching FedNow, a 24/7 instant settlement system which obsoletes middlemen such as Zelle, Paypal, and Venmo. This is like Pix in Brazil, SEPA in the EU, WePay in China, etc. - a fast payment system run by banks and settled through central banks.
It's much like FedWire, but faster, cheaper, and for smaller amounts. You buy houses with FedWire; you buy dinner with FedNow. It's an inter-bank system, like Visa; you have to have an account with a bank to use it. Chase and Wells Fargo are on board, but Bank of America is not.
This will bring the US up to date with the other countries that have national payment systems.
Anybody in the US involved in moving money around needs to get up to speed on FedNow. Fast.
[1] https://www.frbservices.org/financial-services/fednow