The Federal Reserve Board proposed April 8 to let U.S. banks and credit unions use intermediaries in FedNow transfers, dismantling a structural limit that’s confined the platform to domestic-only payments since its July 2023 launch.
Under the current rules, a FedNow transfer can involve only two U.S. financial institutions. The proposed change would let a correspondent bank join as a third party to handle the international leg of a cross-border payment. The Fed’s own framing calls it “additional flexibility” for “new private sector use cases.”
The board voted unanimously on April 7 to advance the proposal. In the approval memo, Fed staff traced the restriction to a 2020 policy decision: FedNow would launch domestic-first to ensure a timely rollout, with cross-border capabilities added later. Participants have been asking for that follow-through ever since the platform went live.
FedNow wasn’t a minor tweak. When it launched in 2023, it was the first new nationwide payments infrastructure built in roughly 40 years. Wiring it for cross-border use now puts it in direct competition with correspondent banking relationships that have handled international dollar flows for decades. Chief FedNow Executive Nick Stanescu told PYMNTS in November that industry feedback guides the platform’s roadmap, and cross-border capability has been one of the most persistent asks.
The comment window opens 60 days after the proposal hits the Federal Register.
James Okafor