FedNow Expands Cross-Border Payments Reach to 1,700 US Institutions

The Federal Reserve's FedNow service has expanded its reach to over 1,700 participating financial institutions in the US, marking a significant milestone in the push for instant settlement. This growth in adoption brings FedNow closer to solving a long-standing problem in cross-border payments.

Under the current framework, FedNow allows two US banks to settle transactions within seconds, but the expansion will enable banks to combine FedNow with intermediary banks for international transactions. The Federal Reserve has proposed changing regulations to allow participants to use intermediaries, such as correspondent banks, when processing cross-border payments.

This move brings traditional banking infrastructure closer to a problem that Ripple and XRP have targeted for years. However, FedNow would still rely on intermediaries rather than XRP as a bridge asset. The expansion creates a clearer competitive overlap with Ripple and XRP's use case in cross-border transactions.