America has decided to take on it's own version of the instant payments. And they call it fednow. As the system is totally controlled and managed by the body of the govt. And they are planning on making this live soon. It is like UPI service of india.
The centralization, transparency and the monitoring of the transactions over the internet is shown into the app. This service would be attaching to the bank accounts like UPI does. It only moves from one to another place without using typical delay like services in past e.g. ACH
Recently uphold wallet has noticed that those users who have bank accounts in US and are holding the XRP in their wallet are getting it settled into the FEDNow bank transactions.
Let's talk about this whole scenario and how it works for the FedNOW users and those who hold the XRP for transactions in USA.
What is FEDNow Service? How does it work with crypto?
FEDNow is instant payment service think of it as a UPI service that is also instant and settles into the bank. And this service is from the USA. And they are settling the funds between the users, business and govt through the banks. And this service is slowly being rolled out in USA. Soon it would be in the hands of every citizen through official app and also bank apps.
In case of crypto, a lot of tokens like XRP are under the govt regulation. And they would be rolling out the update that would settle the crypto to FIAT transaction instantly into the bank through exchanges like Uphold. So say XRP is traded for the USD, you can see the it can be pretty difficult otherwise to go through variety of other banks and the bridges. So now it is working for the crypto settlement through tokens like XRP and other exchanges.
You can read this to know more about the FedNOW service.
Uphold Reports XRP Settlement into US Bank account
Uphold is one of those exchanges which are KYC compliant. And they are kind of very strict. They follow the rules and regulations and they are the first to take out the tokens, defi and other service if they happen to see any issues with it. But the way they are working right now they are sending the funds using the Fednow and this way they are being open towards govt scrutiny so that they won't have issues.
In case of the XRP token, say you have like 200 XRP and you want to take the USD for that in the bank account. You can do that using the exchanges like uphold where they are making use of the RTP, Fednow and other bank settlement services, which makes things easier for you to settle into the USD transactions. That is how the uphold is choosing the direction with consumer settlement. You can check their tweets here.
Future of Crypto Payment Settlement in Banks
Looking at what the coinbase, uphold and many other exchanges are going through is the regulation and adapting to the changes in market. It can mean that there would not be need for the p2p services for those who are earning the crypto through the legal means. You can see that exchanges would be safe place in near future. As in you don't have to trade those typical coins into the p2p market anymore.
Also the way the bank payments and the settlements work I feel that the crypto payment would happen for those tokens which are whitelisted by the govt and banks. So most of the ethereum ecosystem would come into this and there would maximum tokens that would make use of the crypto settlement through exchanges and that would continue to pump the crypto market.
Uphold wallet and exchange service has decided to settle the XRP payments into the bank accounts through FedNOW and RTP. So it'd be reasonable to say that more exchanges are likely to do the same.