Ripple Community: FedNow Instant Payment System Doesn’t Need to Use XRP

Members of the Ripple community are warning users of social media speculation over a connection between the US Federal Reserve and Ripple amid the launch of the FedNow instant payment system.

In recent days, some popular media faces in the XRP community, in response to news of the Fed’s FedNow rollout, have hinted, and sometimes outright stated, that XRP will be used as an intermediate currency in the instant payment system. This has led to much speculation about a connection between the US Federal Reserve project and Ripple.

However, the Fed is unlikely to use XRP as part of its FedNow payment system, says Moon Lambo, one of the popular observers of the Ripple network. Undoubtedly, XRP can be used as an intermediate currency for connecting various payment systems and converting one fiat currency into another, the expert argues. But the use of XRP in the US Federal Reserve’s FedNow payment system, which was originally created for domestic consumption, does not make financial sense.

“Some influencers are misleading the community. To believe that XRP is (or can be) used in the FedNow system, you must have a fundamental misunderstanding of how XRP functions as an intermediate currency and liquidity tool.” wrote Lambo on Twitter.

Lambo’s point of view is shared by blogger Crypto Eri. He expresses disappointment
about influencers in the XRP community spreading misinformation to create hype as “FedNow’s launch in 2023 has nothing to do with cross-border flows.”
Earlier, one of Lambo’s opponents, Alex Cobb, a popular blogger in the Ripple crypto community, with more than 134,000 followers, said on Twitter that the Fed is starting a full-scale launch of the FedNow instant payment service in collaboration with Ripple Labs. He shared link
to The XRP Daily article and encouraged users to retweet the post.

BOOOOOOOOOOOM This is a good one guys

BREAKING TODAY: Federal Reserve Announces FedNow Instant Payment Service Full-Scale Launch Date #Ripple #XRP

RT WIDELYhttps://t.co/HMD5J4WUdH

— Alex Cobb (@AlexCobb_) August 29, 2022

“Financial institutions participating in the project will be able to provide businesses and consumers with the ability to send and receive instant payments efficiently and securely. The speed of payments and instant access to funds will give you more flexibility in managing your personal money.” says
about FedNow on the Fed website.

Based on this definition, some crypto community experts made
assumptionthat the immediate delivery of funds means a completely new settlement system, and not something from an outdated banking system.

“We understand that FedNow is not a cross-border payment system, but they must use the blockchain, even if they do not create some kind of native token to provide liquidity,” said Ripple’s Craig DeWitt, recently elected vice chairman of the Fast Payments Council.

Rumors about a possible connection between the Fed, FedNow and Ripple Labs further fueled the transition of former Ripple adviser Michael Barr to work at the Federal Reserve. The former employee of the crypto company will influence the regulator’s policy regarding cryptocurrencies and stablecoins, as well as serve as the chief bank observer.

So far, the only confirmed connection between Ripple and the FedNow system remains that in February, cloud payment company Ripple Volante Technologies was added to the FedNow payments pilot program. But, although FedNow uses the ISO 20022 standard, like RippleNet, it is not based on the blockchain. Instead, FedNow is going to work with third-party companies and banks.

The other day, Ripple and Tranglo opened a 24-hour Ripple ODL payment corridor to the United Arab Emirates for customers.