The Federal Reserve’s instant payment platform, FedNow®, was officially launched on Thursday morning. Banks and credit cooperatives of all sizes will be able to process their transactions instantly. With FedNow, transactions can take place around the clock, every day.

At present, 35 banks and credit cooperatives in the United States are using FedNow, including the US Department of the Treasury. Furthermore, a group of sixteen service providers are ready to help banks and credit cooperatives with payment processing.

FedNow allows individuals and companies to make payments. Instant payment has many benefits. Federal Reserve Chair Jerome Powell said: “The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient. Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid.”

However, Powell clarified that this newly launched system does not attempt to replace fiat currency. He said that FedNow is “not related to a digital currency” and “it is like other Federal Reserve payment services, such as Fedwire and FedACH. The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.”