The post Circle Comments on Federal Reserve’s Proposal to Extend Payment Service Hours appeared on BitcoinEthereumNews.com.

Iris Coleman Jul 12, 2024 07:33 Circle has responded to the Federal Reserve Board’s proposal to extend the service hours of Fedwire and NSS, advocating for broader upgrades to the U.S. payments system. This week, Circle submitted its response to the Federal Reserve Board’s proposal to expand the service hours of its two large-value payments services: the Fedwire Funds Service (Fedwire) and the National Settlement Service (NSS). According to Circle, the Fed’s proposal presents a meaningful opportunity for U.S. financial regulators to revisit and upgrade the settlement architecture underpinning the U.S. financial system. Potential Benefits and Challenges Many countries currently operate national payments systems on a 24x7x365 basis, demonstrating the ability to offer and support safe and reliable public and private fast-settlement systems, some with upwards of a decade of successful track record. Expansion of Fedwire hours to 22×7 would be a much-needed upgrade to the U.S. wholesale payments system. It also would offer incremental gains to the already thriving suite of 24×7 retail payment services that American consumers use daily. This, in turn, will help reduce some of the operational challenges associated with weekend and bank holiday-related settlement risks. Need for Broader Upgrades As noted in Circle’s response, however, the expansion of service hours will not address some of the most significant challenges affecting everyday consumer payments. In fact, the expansion of services has the potential to exacerbate existing risks and transmission mechanisms from the banking to the payments sectors. As the 2023 U.S. banking crisis demonstrated, liquidity bottlenecks within the banking sector can have widespread and significant reverberations throughout the payments and fintech space. For this and other reasons, Circle has long advocated for regulators to more fully consider unbundling banking and payments. Circle continues to urge the Fed to take a holistic view and ensure that efforts…

---

Filed under: News - @ July 13, 2024 11:18 pm