The US Federal Reserve has welcomed Dropp, a partner of Hedera Hashgraph, into its FedNow ecosystem. This collaboration enables financial entities to leverage the capabilities of Hedera’s Dropp for swift transactions. This move not only strengthens Hedera’s position in the financial world but also led to a notable 16% increase in the value of its HBAR token (as of the publishing date/time of this article.)
But what is FedNow, anyway, and why is getting listed matter to Dropp specifically – and the entire Hedera community and HBAR token holders in general?
What is FedNow?
The U.S. Federal Reserve has introduced FedNow, a groundbreaking government-initiated platform designed for real-time bank money transfers. This system is set to complement existing payment apps like Venmo and Cash App.
Contrary to some beliefs, FedNow won’t replace cash or digital currencies and isn’t linked to the creation of a new digital currency. Its main appeal lies in its government endorsement, positioning it as a potentially more secure and swift alternative for financial institutions.
What is Dropp?
Dropp, in collaboration with Hedera, has introduced an innovative micropayments platform that caters to transactions in HBAR, USD, and USDC. This platform empowers merchants with new revenue models, cost savings, and business expansion opportunities. At the same time, consumers enjoy hassle-free access to various products and services, ensuring their privacy remains intact.
By leveraging Hedera’s robust features, Dropp addresses the limitations of traditional payment models, paving the way for a more efficient digital economy.
What is Hedera?
Hedera is a cutting-edge decentralized public network that employs a unique “hashgraph” consensus algorithm, setting it apart from traditional blockchains. This algorithm ensures rapid transaction speeds, robust security, and fair processing, all while maintaining low transaction fees.
The platform supports a myriad of applications, from decentralized finance (DeFi) to supply chain solutions, and is governed by the Hedera Governing Council, a collection of leading global organizations.
HBAR, Hedera’s native cryptocurrency, facilitates these transactions and incentivizes network nodes.
Why Getting Listed on FedNow Matters
There are many upsides for the apps listed in the FedNow’s list of service providers:
- Credibility and Trust: Being associated with the Federal Reserve, which is the central banking system of the United States, adds a significant level of credibility and trust to the listed apps. It signals to users and other financial institutions that the app meets the standards and requirements set by a highly reputable and authoritative entity.
- Real-time Transactions: FedNow is designed to facilitate real-time payments. Apps listed as providers can offer their users the advantage of instantaneous transactions, which is a significant improvement over traditional payment methods that might take days.
- Wider Reach: The Federal Reserve’s network encompasses a vast number of financial institutions. Being a part of FedNow allows apps to potentially tap into this extensive network, expanding their user base and transaction volume.
- Government Backing: With the backing of a government institution, the apps can assure their users of the safety and security of their transactions. This can be a significant selling point, especially for users who are wary of private payment platforms.
- Competitive Advantage: In the financial tech industry, where numerous apps offer similar services, being a part of the FedNow list can provide a distinct competitive advantage. It can be a unique selling point that sets an app apart from its competitors.
- Future Collaborations: Being on the list can open doors for future collaborations and partnerships with other financial institutions and tech providers. This can lead to the development of new features, services, and innovations.
- Regulatory Compliance: The Federal Reserve has stringent regulatory standards. Apps on the FedNow list are seen as compliant with these regulations, which can be beneficial in terms of legal and operational advantages.
Sources:
- https://coingape.com/fednow-adds-hedera-hashgraphs-partner-as-service-provider-hbar-price-soars-15/
- https://coinmarketcap.com/community/articles/64d9ee35cd87181033fd3097/
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