The Federal Reserve Board has proposed a significant change that would enable U.S. banks and credit unions to utilize intermediaries for fund transfers via the FedNow Service. This development, announced on April 8, 2026, aims to enhance the service’s functionality by allowing transactions with correspondent banks, thereby facilitating international cross-border payments. Currently, the FedNow Service is limited to direct transfers between two U.S. banks.
This proposal could have far-reaching implications for the financial markets, particularly in the banking sector. By expanding the capabilities of FedNow, banks may see increased efficiency in processing international transactions, potentially leading to reduced costs and improved service offerings. The move could also prompt greater adoption of digital payment solutions across the industry, as banks explore new private sector use cases.
Market professionals should monitor the feedback from the public comment period, which lasts 60 days, as it could influence the final implementation of these changes and their subsequent impact on cross-border payment dynamics.
Source: federalreserve.gov