On Feb. 25, the U.S. Federal Reserve reported that its payment systems were down. In reaction to this, Bitcoiners took over Twitter to proudly chant the often-repeated slogan that Bitcoin never does down. Ironically, crypto exchanges had to face the heat of the Fed outage with reports in cashing out or making payments on the platforms. ‘Bitcoin Fixes This’ On Feb. 24, the U.S. Federal service status page notified that a number of its central bank’s services were down, including Fedwire and FedACH that allows fund transfers between banks and customers, saying: “Our technical teams have determined that the cause is a Federal Reserve operational error. We will provide updates via service status as more information becomes available.” Furthermore, the outage signified that banks in the United States were unable to send or receive wires and funds. With U.S. banks handling transactions worth billions of dollars every day, the outage possible resulted in the delay of large-scale transactions across the country. Meanwhile, the crypto community was quick to take a jibe at the centralized financial institutions by highlighting that the Bitcoin network, Ethereum, and many other blockchains were still up and running. They also pointed out that Bitcoin’s network is far more secured than the Fed’s system, as thousands of miners across the globe validate Bitcoin transactions via high-powered computing technology. As the payments network in Bitcoin is decentralized and secured, it makes the network very resilient against hacks or outages. Crypto Exchanges Affected by the Fed Outage Despite the often used celebratory slogans by the crypto community such as ‘Bitcoin fixed this’, the crypto space was indeed affected by the payment outage. For instance, Binance.US reported errors of its fiat services being down, customers were not able to move their funds from crypto exchange to their bank accounts, adding: “The Federal Reserve is down and this will impact all ACH and wire-related activities on Binance US.” Meanwhile, decentralized exchanges did not face any issues as they don’t have to deal with wire transfers or fiat money. However, users only need to swap their tokens that run on the Ethereum network on a peer-to-peer basis. Despite this, decentralized exchanges are still handing billions of dollars worth of transactions daily.
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