The Federal Reserve (FED) recently disclosed the launch of its dedicated instant payments division within the FedNow system. This revelation has sparked considerable interest in the financial markets, as it appears that an official report has highlighted the importance of Ripple crypto (XRP) in the context of instant payments.
Let’s see all the details below.
Latest crypto news from the FED: Ripple (XRP) as a major element in payments
As anticipated, the Federal Reserve (FED) recently announced the launch of its instant payment division of the FedNow system.
This news represents a significant step toward accelerating payments in the US and has attracted great interest in the cryptocurrency and blockchain arena.
In the context of the Federal Reserve’s announcement, it emerged that XRP will be used to facilitate the blockchain part of the FedNow payment service, a factor that confirms XRP’s important position in the world of cryptocurrencies and financial technologies.
Indeed, the document released by the Federal Reserve highlighted that XRP will be the main vehicle for ensuring the transparency and efficiency of their blockchain-based payment infrastructure.
The Federal Reserve’s announcement sparked considerable excitement among the cryptocurrency community and blockchain enthusiasts, as it strengthens the legitimacy and acceptance of cryptocurrencies in mainstream financial institutions.
XRP, with its transaction speed and liquidity features, seems to be an ideal choice to enable instant payments in the FedNow system.
This development could also pave the way for greater adoption of XRP in other parts of the financial sector, as well as promote greater awareness of cryptocurrencies among the general public.
Ultimately, the Federal Reserve is laying the groundwork for a new era of instant payments, and XRP will be at the center of this transformation. It remains to be seen how this partnership will develop over time and what benefits it will bring to the world of payments and cryptocurrency.
Another crucial decision from the Federal Reserve on the FOMC rate coming up
Attention is intensifying in both the traditional financial and cryptocurrency sectors as the Federal Reserve’s FOMC rate decision, scheduled for Wednesday, approaches.
Federal Reserve Chairman Jerome Powell will be the center of attention when he reveals the decision, just 30 minutes after the announcement.
In recent months, not surprisingly, we have seen a rise in inflation, with data showing an annual increase of +3.2% in July and as much as 3.7% in August. The most significant increase occurred in August, at +0.6% per month, marking the largest growth of the year.
At the same time, on the labor market front, signs of a slowdown emerged, with a disturbing rise in the unemployment rate from 3.5% in July to 3.8% in August, confirming the prospect of a slight deceleration.
Despite inflation concerns, Fed officials seem to believe that current monetary policies give them the flexibility to observe developments.
As a result, market participants do not anticipate any change in rates at this stage of the FOMC cycle.
The bond market, represented by the CME’s FedWatch indicator, suggests a 99% probability that the federal funds rate target will remain stable between 5.25% and 5.5%.
If this occurs, it will be the first time since March 2022 that rates will remain unchanged for two consecutive sessions, marking a significant moment.
However, beyond the rate decision and Powell’s speech, the release of the Fed’s new “dot plot“ promises to be the most crucial event.
This visualization, which contains projections of interest rates and economic growth, could prove to be the main market catalyst throughout the event.
Mixed views on FOMC’s impact on Bitcoin
Keith Alan, co-founder of Material Indicators, analyzed the current state of Bitcoin, highlighting the volatile environment surrounding the FOMC’s upcoming interest rate decision.
Specifically, Alan stated the following on the subject:
“The fun continues as we get closer to Wednesday’s FOMC rate hike decision,”
pointing out the mixed signals evidenced by Bitcoin’s daily and weekly charts.
He also raised the possibility that Monday’s rally may have been the result of market manipulation rather than a broader change in sentiment.
On the other hand, Furkan Yildirim focused attention on the possible implications of the interest rate decision on cryptocurrency.
Yildirim suggested that the FOMC may not have a significant impact on Bitcoin and cryptocurrencies in general, pointing out that hedge funds are now sharply long the US dollar for the first time since March.
In addition, he indicated that even if the rate decision could be neutral, the general upward-oriented tone could persist.
Yildirim highlighted the currency dynamics at play, saying that the recent rise of the US dollar was largely attributable to the weakness of the euro after the ECB decision.
In fact, he suggested that in shorter time frames, Bitcoin has not shown an inverse correlation with the performance of the US dollar, and should the dollar index (DXY) continue to rise, Bitcoin could continue to gain momentum, driven by its inherent dynamics.
Despite the recent increase of more than 7% in eight days, it is important to note that Bitcoin continues to show a pattern of lower highs over longer time frames, indicating a downward trend.
Unless it can break through the $28,000 threshold, the price of BTC will remain in a downward trend and will need to confirm a positive turn.