Some other services offered by the Fed were also disrupted some of which include, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web and FedMail.
For an hour, the Federal reserve wire and ACH systems were down. During the Wednesday downtime, a number of US-based crypto exchanges was affected.
The systems allow the Fed to send wires and settle the transactions in real-time. Fedwire offers real-time settlement across accredited institutions. Gemini and Kraken reported delays in Federal Reserve wire and automated clearing house transactions. But the severity of it was much greater as no bank was able to send or receive wires. During the downtime, many in the crypto community were quick to point out that Blockchain could serve the same purpose without ever experiencing a downtime period. In line with blockchain, it was also a perfect moment to sell Bitcoin as the best form of money.
🚨🚨 Entire Federal Reserve payment system CRASHES with banks unable to send or receive wires
FILE UNDER "WHY BITCOIN"!! pic.twitter.com/gga38vk8Yw
— Beautyon (@Beautyon_) February 24, 2021
Some other services offered by the Fed were also disrupted some of which include, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web and FedMail.
At the time, the Fed in an effort to curb panic was quick to comment on the failure. Jim Strader, Richmond Federal Reserve spokesperson stated:
“A Federal Reserve operational error resulted in disruption of service in several business lines. We are restoring services and are communicating with all Federal Reserve Financial Services customers about the status of operations.”
The Fed in a few hours had restored all but Account Services. During the disruption, neither the dollar nor Bitcoin seemed to react. There was also no major impact on any bank or exchange during the outage.
Federal Reserve Calls for Digital Currency Clarity
On the same day of the outage, the Fed was reigniting interest in issuing a digital currency. The US Federal Reserve Chairman Jerome Powell stated that 2021 would be the year for broad consultation with the public about a potential CBDC. In FED notes outlining some ‘preconditions’ on any potential digital currency, the body noted;
“Engaging with individuals and businesses and consulting with consumer groups, community organizations, and business associations to understand the use case for a CBDC will help in the decision whether to issue a CBDC and its potential design,”
The paper further noted that the senate had a big role to play, with any potential issue of a CBDC having to be on a “legislative authorization.” Features of the digital dollar were also key with interest in privacy, security access and delivery. The notes however failed to report if the digital currency would be blockchain-based or not.
The Feds stance comes just a week after Treasury Secretary Janet Yellen talked about a digital dollar being feasible. She further pointed out that with too many Americans lacking access to payment systems and bank accounts, a CBDC would be ideal.