Key Points

  • FedNow has showcased a new DLT-powered payments platform built on Hedera to its list that showcases service providers. 
  • The Federal Reserve previously indicated that it would not support or endorse any showcase providers featured on its website.

The United States Federal Reserve has showcased a DLT-powered company as a service provider on its website. The administrator said showcasing a company on the website does not necessarily mean it supports the company. 

FedNow exhibits a DLT-powered payments system as a service provider

Dropp, the company in question, is a DLT services provider powered by the Hedera Hashgraph and has now appeared on FedNow’s Service Provider Showcase section. This section aims to connect financial institutions and businesses with service providers that could “help them innovate and implement instant payment products using FedNow Service.”

Though this showcasing could signal that FedNow is warming up to DLT-powered services providers, the Federal Reserve has previously stated that it doesn’t support any of the companies posted there. Also, it has said that the materials exhibited on its website 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.”

This development catches the crypto community divided time following the launch of PayPal’s PYUSD stablecoin. The coin has smart contract functionalities that allow for the censorship of transactions which a faction of the crypto community sees as a start to undermining crypto culture like decentralization. 

Now, even with FedNow allowing DLT-powered services providers on their website, some still feel that it’s not enough indicator that crypto will be allowed to fully shape up as an alternative to the ‘flawed’ monetary systems. 

Keep watching Fintech Express for more updates on banking and other fintech-related developments.