The Federal Reserve’s payment system, used to transfer money back and forth between financial institutions, experienced a large outage on Wednesday, CNBC reported.
The payment system is an important component of U.S. banking and finance. Numerous services were impacted by Wednesday’s outage, including Account Services, Fedwire and Fed ACH, according to CNBC.
DEVELOPING: The Federal Reserve’s system for interbank payments went down Wednesday afternoon.
— Bloomberg Economics (@economics) February 24, 2021
Banks, credit unions, and other financial institutions were not able to send or receive money because of the outage, CNBC reported. The Fed ACH outage might have a more significant impact on the U.S. financial system, because the service deals with “direct deposits of payroll, Social Security and income tax refunds as well as auto payments for mortgages and utility bills,” according to the outlet.
“Our technical teams have determined that the cause is a Federal Reserve operational error,” the Fed said on Wednesday, according to Reuters. “The Federal Reserve Banks have taken steps to help ensure the resilience of the Fedwire and NSS applications, including recovery to the point of failure.
By 2:45 p.m., Fedwire and Fed ACH were reportedly operating as normal, CNBC reported.
Earlier in the week, Federal Reserve Chairman Jerome Powell testified to the Senate Banking Committee about making an economic recovery and the need to pursue a “digital dollar.” (RELATED: Continued Business Failures Pose ‘Considerable’ Risk To Economy, Federal Reserve Says)