Jonathan on Nostr: In July of this year, the Federal Reserve will launch its long-awaited FedNow service ...

In July of this year, the Federal Reserve will launch its long-awaited FedNow service for instant payments between depository institutions, adding a new wrinkle to the fabric of global payments. Therefore in this paper, we explore the rapidly evolving landscape of settlement networks, specifically focusing on bitcoin and FedNow, two systems often perceived in direct conflict primarily as competitors. By examining their historical context, technological underpinnings, and the importance of the underlying assets’ integrity, we argue that these entities actually cater to distinct purposes and audiences and are likely to co-exist more symbiotically than most expect. While the rise of bitcoin as the world reserve asset may ultimately challenge US settlement networks, in the intervening decades the US dollar will inevitably interact with and leverage the bitcoin network to facilitate the global economic demands of individuals and businesses that want to interact with US dollars (a co-opetition of sorts). Meanwhile, the financial utility of both systems and the innovative solutions offered by companies leveraging the bitcoin network will provide a superior user experience and potentially counterbalance any attempts by foreign governments or conglomerates to displace the US dollar with a more restrictive monetary asset (e.g. BRICS commodity backed currency or a CBDC). https://ten31.vc/content/settlement-networks-bitcoin-and-fednow