Some users have reported on the social media that the United States Federal Reserve System, also known as Fedwire, went down for a noticeable period on April 2. The US-based fund’s transfer system was not available for several minutes, and many users claimed that they couldn’t process several deals because banks were not able to make money transactions.
One of the users posted the matter of system unavailability on Reddit saying due to this issue they were not able to process any incoming or outgoing wires in the entire country.
Federal Reserve’s Official website that displays the current status of the services is displaying service enabled status now. However, a screenshot from an Instagram user shows, Fedwire funds and national settlement service wasn’t available during the issue.
Impact of Fedwire Unavailability
Fedwire, operated by 12 Federal Reserve Banks in the US, is a massive network for payment processing between member banks and other participants institutions including depository financial institutions, American branches of foreign banks and others.
As noted by Federal Reserve official, Fedwire has a massive scale of operations; It processed more than $2.8 trillion operations daily in January 2019. Contrarily, the Bitcoin network transferred more than $3.2 trillion in the whole year of 2018.
Due to the immense number of users of the Federal Reserve, it wouldn’t be wrong to conclude that its unavailability had a significant impact on yesterday’s transactions.
Is Bitcoin’s Promise of Decentralization a solution?
Although the Federal Reserve did not provide any explanation for the downtime, this not the first time that centralized systems are facing a downtime. In the past, downtime issues linked to several other centralized systems like Visa and Wells Fargo have been reported before too. The biggest problem with such problems is that they affect a large scale of people.
Decentralization can be a solution for the centralized systems related Problems. This increasing need for the decentralized economic system has led to the growing use of bitcoin as a prominent payment network.
Bitcoin was designed in an attempt to decentralize the financial system and has maintained a 99.9835% uptime since inception.
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