Fed’s Schmid says instant payments will outpace digital assets

Kansas City Fed President Jeff Schmid argues FedNow and real-time bank rails, not stablecoins, are where the future of US payments is headed A Federal Reserve official has picked a side in the payments race, and it isn’t the blockchain. Kansas City Fed President Jeff Schmid has argued that US instant payment systems, led by the Fed’s own FedNow service, are positioned to surpass emerging digital asset payment technologies like stablecoins and blockchain platforms. Schmid framed FedNow as a stable, scalable evolution of the existing banking system rather than a replacement for it. What Schmid actually said Schmid laid out his view at an event at the Hoover Institution and repeated it in interviews. His core argument is that real-time settlement is becoming the default for US payments, not a premium feature. The stakes are large. Daily US payment flows are projected to fall between $5 to $10 trillion, all settling in real time. For banks, that shift changes the job description. Schmid highlighted that liquidity and duration management will become central to banking operations in the near future. Schmid also pointed to tokenized deposits as something that could redefine traditional ba...