Latest news with #Fedwire
Yahoo
4 days ago
- Business
- Yahoo
Fed's ISO ‘big bang' hits next week
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Financial institutions that seek to send payments via the Federal Reserve's Fedwire Funds Service must migrate to a new international standard come Monday. That's when banks are required to begin using the ISO 20022 standard for electronic payments they choose to send over that Fed real-time settlement rail. While the central bank delayed an implementation deadline multiple times, after a preliminary 2023 proposal, it says this one is for real. The Geneva-based International Organization for Standardization gave the world the ISO 20022 standard over two decades ago to encourage financial institutions around the world to embrace a more modern messaging system. Some 70 countries have already adopted the standard that provides operational efficiencies, more data-sharing and less outdated batch-processing. The shift will allow banks around the world to communicate, share data and operate by the same rules for cross-border payments, said Elias Ghanem, the global head of consulting firm Capgemini's Research Institute for Financial Services. The change has a host of implications for international commerce, he explained during an interview. Global payments are 'deep and complex,' said Ghanem, who formerly worked for Visa and PayPal Holdings.'It is essential that we all speak the same language. We harmonize the data. We harmonize the rails.' The Federal Reserve already put its new real-time payments system FedNow on the standard when it was launched in 2023. The bank-owned Clearing House also has its private real-time rail, the RTP network, using the ISO standard. The new standard will be particularly important for banks and credit unions seeking to send cross-border payments because many foreign financial counterparts already use the standard. The Fedwire channel handles some $4.7 trillion in worldwide commerce every day, with international commerce mainly conducted in U.S. dollars. 'This is a massive upgrade for the entire payment industry,' said Finzly CEO Booshan Rengachari. 'It is an upgrade for the entire world mainly because the dollar is the global currency.' Charlotte, North Carolina-based Finzly is a software provider to financial institutions that has been working to make sure its clients are prepared for this moment. It's not a gradual transition, but rather a 'big bang conversion' that happens Monday when the Fed shifts the Fedwire service to the new standard, Rengachari explained. It's the biggest event to happen in payments during his decades-long career in financial services, Rengachari said. The new standard not only allows banks and their clients more agility and efficiency in pursuing business opportunities, it also helps them work together to thwart threats, Ghanem said. 'We all reduce risk,' Ghanem said. 'We all fight together.' Most major U.S. banks are prepared for the Fed shift to ISO 20022, though some smaller institutions in the U.S. may not be, Ghanem said. If they haven't been able to implement the technology upgrade themselves, presumably they're working with an outside vendor to do so, he said. Mihail Duta, a director at financial services software provider Finastra in New York, said he also believes that most U.S. banks are prepared for the new standard. His London-based company, with a U.S. headquarters in Lake Mary, Florida, has been working with both the Federal Reserve and financial institutions to get them ready. 'We've touched every single customer to ensure that the right software is in place, that they've done their testing, that they have everything they need to process,' Duta said. While there could be some outlier situations with snafus, said Duta, he added that he doesn't expect any major banking disruptions on Monday. 'Given all the prep work and all the diligence that was done, I think it's unlikely that something dramatically wrong will go on July 14,' he said. To brace for any potential mishaps, Finastra is advising its financial institution clients to start a little earlier than usual on Monday to give themselves more processing time to 'work through any wrinkles,' he said. 'All providers, including the Fed, are thinking the same way: It's all hands on deck,' Duta said. 'I can tell you, from a Finastra perspective, nobody's taking off July 14.' That's the case for Rengachari's crew too. In fact, the company has reservations at nearby hotels for some of the firm's 200 employees that will be working more hours than usual. One of the key benefits of the technology associated with the new standard is its ability to carry more data with a given transaction. For instance, international purchase orders can carry documents, like an invoice, and more information about a particular shipment. The reports that banks can generate regarding those transactions will also benefit from the richer data, as will their fraud-fighting capabilities, Duta said. 'The foundation has been laid for a major transformation, and that's going to be a good thing for the entire industry,' Rengachari said. Regional U.S. banks that don't adopt the standard immediately may be less troubled because they're mainly focused on local transactions, Ghanem said. Mainly, it could mean delays for some payments, he said. But being in tune with the global payments ecosystem is ultimately important for all U.S. financial institutions, and may give those banks that are up-to-date on the standard an edge, he said. The new ISO standard links to payments systems run by different organizations, such as the Belgium-based international cooperative Swift, allowing them to better communicate with each other. Swift, which is a messaging system for global payments, has allowed users a more gradual conversion to the ISO standard, but is also moving toward a November 22 deadline to complete that transition. As for the Fedwire milestone Monday, Rengachari said he's confident it will go smoothly, after what he expects will be a busy weekend. 'If anything doesn't go the way it is planned, we will be there to make sure things are back on track,' he said. Rengachari has also prepared to celebrate Monday after the transition is complete, lining up a bottle of champagne to be opened. Clarification: The story has been updated to clarify that the Fed hadn't previously postponed the ISO standard implementation deadline set in its final notice. It had previously contemplated earlier implementation dates before the final notice. Recommended Reading Fed delays start of new Fedwire standard
Crypto Insight
28-05-2025
- Business
- Crypto Insight
How central banks are testing blockchain-based monetary policy
Tokenized monetary policy means that the liabilities and assets a central bank uses to steer short-term interest rates exist as programmable tokens on a distributed-ledger platform. In such a token arrangement, what the BIS describes as an ecosystem where money and securities share a common ledger, monetary functions are executed by smart contracts, replacing the traditional batch file processes used in overnight real-time gross settlement (RTGS) systems. In practice, each policy tool is expressed as code: Project Pine demonstrated all three, using ERC-20 tokens for reserves and securities on a permissioned Ethereum-compatible chain. But how is tokenized monetary policy different from traditional monetary policy? Traditional policy operations rely on central bank systems such as Fedwire or the Bank of England's RTGS. These systems close overnight, settle in discrete batches and require multiple human sign-offs. A tokenized system settles atomically in seconds, keeps an immutable audit trail and lets policy adjustments propagate without waiting for dealers to book trades. The BIS paper on tokenisation notes that combining assets and settlement on a single ledger can shrink operational risk and latency. Did you know? A repo is a short-term secured loan in which one party sells securities and agrees to repurchase them later at a higher price. In contrast, a reverse repo is the same transaction viewed from the counterparty's perspective (buying the securities and later reselling them).
Business Mayor
22-04-2025
- Business
- Business Mayor
Crypto Analyst Reveals When The XRP Price Will Reach $25 – It's Not Far Off
Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing Strict editorial policy that focuses on accuracy, relevance, and impartiality Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. The XRP price crossing the $10 mark into the double-digit territory remains a widespread school of thought, and crypto analysts have, at different points, shared analyses that seem to support this notion. Most especially, since the XRP price broke the $3 mark and is now holding support above $2, it has given fuel to these expectations. One crypto analyst takes it a step further by giving a close timeline for when XRP could break above $20. 4 Reasons Why The XRP Price Could Rally Crypto analyst and XRP advocate, Diana on X (formerly Twitter), put forward a total of five different reasons why they believe that the XRP price is headed for double digits. These range from broader market moves to more specific developments to XRP. Related Reading: Bitcoin Price Still Has A Chance To Clear $90,000 If It Breaks This Level The first of these reasons is the historical performance and technical analysis. The crypto analyst points to the rally in 2024 that saw the XRP price cross $3 for the first time since 2017. Currently, the altcoin is seeing a consolidation after a price crash, but continues to hold above the Ichimoku support. If the XRP price repeats the rally from 2024, then a 600% rally to $17.50 could be on the horizon. Another reason why the XRP price could explode is the Ripple versus the Securities and Exchange Commission's battle coming to an end. Once this is resolved, the analyst believes the regulatory clarity it brings would give institutions insight to buy into the altcoin. Next is the high number of XRP ETFs that have been filed so far. Pointing to the performance of Bitcoin and Ethereum after their respective ETFs were approved, the XRP price could see a similar rise in price. Moving toward adoption, the ISO 20022 and the Fedwire adoption is another catalyst revealed by Diana. It is possible that the Fedwire could see XRP embedded in global banking rails, bringing newfound utility that could trigger another XRP price rally. Source: X Timeline To Reach $20-$25 As for when the XRP price could climb above $20, the crypto analyst believes that this could happen as early as January 2026. Using the fundamentals, she points to a 600% post-ETF rally similar to that of Bitcoin, which would mean that from here, it would take it to $17.50. But a 1,000% rally could possibly take it as high as $27.50. Related Reading For the three possible scenarios, the crypto analyst predicts a 300% rally to $10 as a conservative target. Then a 500% rally to $17.50 as a base target. Finally, a 1,000% rally to $27.50 as an aggressive target. However, in all of this, the crypto analyst says the XRP price must break $3.40 for another rally to take place. $2 support holds firm amid dip | Source: XRPUSDT on Featured image from Dall.E, chart from
