Federal Reserve Board invites public comment on proposal that would allow U.S. banks and credit unions to use intermediaries to transfer funds through the FedNow Service
The Federal Reserve Board on Wednesday invited public comment on a proposal that would allow U.S. banks and credit unions to use intermediaries to transfer funds through the FedNow Service.
- This additional flexibility would support new private sector use cases for the FedNow Service. For example, it would allow U.S. banks to use FedNow to transact with correspondent banks to facilitate the international portion of a cross-border payment. Currently, a transfer of funds sent through the FedNow Service can include only two U.S. banks.
Comments are due within 60 days after publication in the Federal Register.
The Federal Reserve's proposal to allow U.S. banks and credit unions to use intermediaries for fund transfers via the FedNow Service represents a move towards greater flexibility in cross-border payments. This could have significant implications for international transactions, potentially enhancing efficiency in the banking sector and influencing how the U.S. dollar is utilized globally. Stakeholders should monitor feedback and the upcoming implementation timeline as it may signal a shift in payment dynamics.