Introduction

Amazon Web Services (AWS) appears poised to become critical infrastructure for the U.S. financial system.  Baron’s research reveals that the Federal Reserve System (Fed) has selected AWS as the dominant cloud provider for the new and much-anticipated FedNow Service, an instant payments rail set to launch in 2023.  Although the Fed’s exclusion from the Federal Acquisition Regulation (FAR) limits disclosure of this once-in-a-generation modernization effort, publicly available information suggests that FedNow represents a significant deviation from the federal marketplace’s embrace of multi-cloud as a best practice.  Based on “The Everything Store’s” history in other sectors, Amazon likely will exploit FedNow to drive expansion into consumer finance, as well as leverage long-duration, high-margin cloud revenue to support aggressive pricing and fund infrastructure development.

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