After Janet Yellen criticizes Bitcoin, the Fed's payment system fails for hours

Charlie Taylor

The Federal Reserve (Fed) system, which allows financial institutions in the United States to send and receive money electronically, was inactive for several hours on Wednesday, but appeared to be returning to normal only in the late afternoon. The failure came just two days after Treasury Secretary and former Fed Chairman Janet Yellen stated that Bitcoin is an "extremely inefficient means of payments". The "operational error", as the American central bank described, impacted several services including its main automated clearing system, which connects depositaries and related institutions by sending electronic credit. A Fed statement said it became aware of a problem around 11:15 am. A person at a Wall Street bank said the system appeared to be back up by 2:45 pm.

The Fedwire Funds Service, Fedwire Securities Service and National Settlement Service have resumed processing and are operating normally, the Federal Reserve announced.

The statement further noted that the failure affected payment deadlines and said the Fed "will communicate remediation efforts to our customers, when available".


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The disruption also occurred in the same week that Fed President Jerome Powell spoke to Capitol lawmakers about the progress the central bank has made in its consumer-focused payment system and efforts to develop a “digital dollar.” a year in which we will engage with the public very actively, ”said the central bank leader during a hearing on a House committee. Interruptions, especially with the ACH (bank transfer) system, can have far-reaching impacts. The system deals with direct payroll deposits, Social Security and income tax refunds, as well as car payments for mortgages and utility bills. But unlike traditional banks, which go through countless instabilities due to technical failures and human, the decentralized Bitcoin network is practically always available.According to the BuyBitcoinWorldWide website, Bitcoin has spent approximately 99.986% of the time working perfectly since its birth in January 2009. In all these years there have been only two failures that add up to 14 hours of interruption normal operation, one in 2010 and the other in 2013.Read more: Cryptocurrencies gain their own code in the 2022 Income Tax

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