FedNow Edges Closer to Cross-Border Payment Capability

The Federal Reserve is on the verge of extending its real-time payment system, FedNow, to cross-border transactions. According to a recent blog post on the FedNow website, the central bank is advancing a proposal made in April that would allow banks participating in FedNow to tap intermediaries, including non-U.S. banks, for sending money across borders. This move aims to improve what has been a slow and expensive process of moving money internationally.

While the post suggests that this enhancement is imminent, it also notes that any such change is contingent on approval from Federal Reserve governing bodies. The central bank declined to comment on when the board might vote on moving forward with the cross-border proposal.

The development comes as companies are racing to offer improved cross-border payment services in light of stablecoin developments opening new international payment possibilities. Fintechs such as Remitly have entered the fray, challenging established players like Western Union.