FedNow showcases DLT-powered payments system as service provider
The Federal Reserve wrote that it does not support or endorse any showcase providers featured on its website.
The United States Federal Reserve’s instant payment system, FedNow, has added a company powered by the distributed ledger technology (DLT) platform Hedera Hashgraph to its list showcasing service providers.
On Aug. 14, FedNow’s official website added Dropp — a micropayments platform built on Hedera — to its FedNow Service Provider Showcase section. The section aims to connect financial institutions and businesses with service providers that can “help them innovate and implement instant payment products using the FedNow Service.“
According to FedNow’s site, Dropp is a digital solution that was made so that merchants can accept payments at low costs. The company uses DLT and regulated banking tech to build its solution that allows merchants to accept payments without paying huge transaction fees.
While the new update seemed like the Federal Reserve is warming up to DLTs, the FedNow service also wrote on its website that the materials are only “presented as a convenience” to potential FedNow service participants.
“Federal Reserve Financial Services (FRFS) is merely the host for the showcase and does not support or endorse any showcase providers, and the inclusion or exclusion of a provider should in no way imply any recommendation or endorsement by FRFS,” FedNow wrote.
Related: FedNow Service has no relation with CBDCs, Federal Reserve clarifies
Meanwhile, some crypto community members criticized the new development, saying that people may have given up on the idea of crypto being an alternative to the corruption in financial systems. On Reddit, a community member expressed feeling hopeless as people cheered on the new partnership. According to the Redditor, it’s understandable that people are trying to get a better financial situation, but it should not be at the expense of having a fair and open financial system.
Earlier this year, other blockchain networks announced that they would connect to FedNow service but disappeared from the site days after being added. On May 11, Metal Blockchain announced that it would be connecting to the FedNow service. However, the service provider was removed from the site after a few days.
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