The Federal Reserve is studying proposals for electronic payments systems meant to speed up and secure American commerce, and it will release two reports on its findings in 2017, the central bank announced Tuesday.
Two Fed national task forces are looking over 19 proposals from across the finance and technology industries that focus on how money can be transferred electronically between businesses and people.
Financial technology (FinTech) advocates and industry members say electronic payments systems can make commerce safer and quicker than using paper currency or credit cards.
Examples include applications that let customers pay by holding their smartphones up to cash registers, or send and receive money from bank accounts as one sends a text or email.
Others include Bitcoin’s blockchain system that uses a secure user-to-user network that lets consumers send money to each other without using a bank or financial institution.
One task force will focus on faster payment methods while the other will study overall system security.
The first part of the task force report, scheduled to come out in January, will cover the role electronic payments systems could play and what needs they could address. The second part, due “mid-year 2017,” will include a “discussion and assessment of the specific proposals.”
"The review that began yesterday is the next step in the ongoing process to improve the speed and safety of payments in the United States,” said Gordon Werkema, Payments Strategy Director for the Federal Reserve System.
Industry leaders involved with the Fed’s review praised the central bank for focusing on emerging technology.
“Payments should be as fast as sending an instant message, and they should widely accessible and affordable to all consumers,” said Brian Peters, executive director of Financial Innovation Now, a coalition of major technology companies involved with FinTech.
The Fed has been studying FinTech and meeting with lawmakers on the subject throughout the year. Federal Reserve Governor Lael Brainard will give a speech Friday on blockchain payments.