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The notice of proposed rulemaking on plans to open the instant payments service to private-sector intermediaries is a step towards permitting its use in cross-border transactions, bringing the US into line with a global trend.

Since the launch of FedNow in July 2023, qualifying transactions have been limited to those involving a US sending bank, a US receiving bank and a Federal Reserve Bank as an intermediary (if required).

This model has effectively restricted FedNow payments to the domestic market, as it does not allow for funds to be transferred via correspondent banks.

The Federal Reserve Board’s (FRB) consultation on the , published  in April 2026, proposes removing this constraint, allowing intermediaries to be included in the payment chain and turning from a closed-loop domestic tool into a foundational layer for global liquidity.

In practical terms, this means a US bank could send funds via FedNow to another institution acting as an intermediary, which could then facilitate the onward, international leg of a cross-border transaction (or vice versa). 

FedNow would become an on/off ramp for international value transfers, using private-sector banks to bridge the gap between US dollars and foreign currencies.

For banks and non-bank payment service providers (PSPs), this could create new use cases for FedNow, particularly where speed on the domestic leg of a transaction is commercially valuable.

As is also acknowledged in the consultation, the amendments would bring FedNow closer in functional terms to Fedwire, the US real-time gross settlement (RTGS) system, which has permitted intermediaries “for decades”.

This could lead to a shift in liquidity management: banks may prefer FedNow for smaller, high-velocity cross-border payments such as remittances, while continuing to use Fedwire for high-value corporate treasury.

The notice of proposed rulemaking is now subject to a 60-day comment period, ending June 9, 2026.

Compliance and operational implications

The FRB notes that it does not believe that its proposed amendments create “material new money laundering, sanctions evasion, or payment system integrity risks”.

“The changes would not alter the payment flow between FedNow Service participants or change which entities can connect to the service,” it says.

“Like the Fedwire Funds Service, the amendments would simply allow additional transfers before and after funds are sent through the FedNow Service, enabling participants to settle the US domestic portion of larger cross-border transactions.”

Similarly, the FRB confirms that it has not identified any “likely” duplication and/or potential conflict between the proposed amendments and any other Federal rule.

Despite this confidence, participants will need to scrutinise cross-border transactions closely to ensure they are fully compliant with existing regulation.

In addition, although the proposal may not create new risks, it could lead to a recalibration of existing risks between participating firms.

Where multiple institutions are involved in a single transaction, it will be crucial for firms to understand who is required to perform tasks such as sanctions screening, anti-money laundering (AML) checks and transaction monitoring, and at what stage.

The compression of processing time inherent in instant payments may also have practical implications.

For example, it will likely necessitate new service level agreements (SLAs) between sending banks and intermediaries to define liability if a cross-border payment is flagged after the domestic leg has cleared.

In addition, screening and validation processes that may be manageable in batch or deferred systems would have to operate in as close to real time as possible.

This places greater emphasis on data quality and message standardisation, particularly where cross-border elements introduce additional compliance requirements, depending on jurisdiction.

A broader pattern: central banks open their rails

The Fed’s proposal should also be seen as part of a broader trend in which central banks are reconsidering the limits of their domestic payments systems.

Historically, domestic payments systems have been designed as closed environments, with cross-border payments handled separately, typically through correspondent banking networks. But that distinction is beginning to fade.

In many jurisdictions, central banks are increasingly exploring ways to extend the reach of their domestic payments systems, either by interlinking them, opening access to new participants or enabling intermediated use cases.

The FedNow proposal fits squarely within this pattern.

Interoperability in practice: Project Nexus 

One of the clearest examples of the trend is Project Nexus, developed under the leadership of the Bank for International Settlements (BIS) Innovation Hub in Singapore.

As covered by ���ĺ�������, Project Nexus aims to connect domestic instant payment systems through a standardised interoperability layer, allowing payments to travel between jurisdictions with minimal friction.

At present, the central banks of Thailand, India, Malaysia, Singapore and the Philippines are working towards linking their respective instant payments systems via Nexus, which is expected to go live later in 2026. 

Nexus does not create a single, global instant payments system, but rather preserves the sovereignty of each of its participants while enabling them to transact with one another.

Although the model may differ, with the US approach being more market-led, the objective is similar to that of the FRB’s proposal: to allow domestic payment rails to support cross-border transactions without fundamentally redesigning them.

Bilateral corridors

Alongside multilateral initiatives, a growing number of bilateral linkages between domestic instant payment systems are already in operation.

Bilateral linkages between instant payments systems in South and Southeast Asia have been rapidly expanding since 2021, when the first such linkage was launched between Thailand’s PromptPay and Singapore's PayNow.

Similar to Nexus, though with much lower complexity, these arrangements demonstrate that cross-border functionality can be layered onto existing systems without requiring wholesale transformation.

They rely on a combination of technical integration, intermediary participation and foreign exchange mechanisms – elements present in the FedNow proposal.

Expanding access

A related approach can be seen at the Bank of England (BoE), which has spent the past decade systematically .

In 2017, the BoE allowed non-bank PSPs to hold settlement accounts in RTGS, becoming the . Foreign banks are also able to access RTGS accounts for settlement where they meet UK regulatory requirements.

The BoE argues that wider access allows more payments to be settled in central bank money, reduces reliance on intermediaries and supports competition and innovation in payment services.

In this respect, the BoE’s RTGS framework illustrates the direction in which other central banks, including the Fed, are now heading: from closed to open networks that support a range of access models, and that enable more efficient cross-border payment flows.

Policy backdrop: FSB, G20 roadmap

In their public statements, these initiatives are framed by the participating central banks as underpinned by the Financial Stability Board (FSB) and its .

Published in 2020, the  for improving the speed, cost, transparency and ease of access of cross-border payments by end-2027.

A central theme of the roadmap is interoperability between payment systems, jurisdictions and participants.

The FedNow proposal can be seen as part of this broader effort, translating high-level policy objectives into concrete changes in system design and legal frameworks to optimise cross-border payments.

By allowing intermediaries, the Fed is effectively checking the interoperability box on the G20 Roadmap without having to build complex bilateral links with dozens of other central banks.

In its notice of proposed rulemaking, the FRB is effectively acknowledging that the future of FedNow lies not just in domestic speed, but in its ability to serve as a foundational high-speed rail for the increasingly borderless global payments ecosystem.

The success of the initiative will depend on how effectively participating banks can bridge the compliance gap between real-time domestic settlement and the varying regulatory demands of different jurisdictions.