Federal Reserve Proposes FedNow Rule Changes to Support Cross-Border Payments
FedNow, launched by the Federal Reserve Banks on July 20, 2023, is a round-the-clock interbank real-time gross settlement service. Regulation J currently limits each transfer to two U.S. banks, restricting the service to domestic payments. Easing the rules on intermediaries would allow private providers to connect instant settlement in the United States with the international leg handled by correspondent banks, making cross-border payments faster and more flexible.
The Federal Reserve Board unanimously approved the proposal on April 7, 2026, and opened it for public comment on April 8. The proposed changes to Subpart C of Regulation J would allow banks and credit unions to use intermediaries other than Federal Reserve Banks. The comment period closed on June 9. FedNow settled 2,728,510 transactions worth a total of $271.25 billion in the first quarter of 2026, up 10.6% and 7.7% from the previous quarter, respectively.
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The history behind this eventFedNow Cross-Border Plan Wins Payments Industry Backing
The Federal Reserve launched FedNow on July 20, 2023, as a 24/7/365 interbank real-time gross settlement service for instant domestic payments. Regulation J currently limits a FedNow transfer to two U.S. banks, preventing participants from inserting an overseas correspondent into the payment chain. Allowing intermediaries would give private providers a second real-time rail, alongside Fedwire, for settling the U.S. leg of international transfers and could improve the speed and efficiency of dollar-denominated cross-border payments.
The Fed proposed amendments to Regulation J on April 8, 2026, allowing banks and credit unions to designate intermediaries other than Federal Reserve Banks in FedNow transfers. The proposal would let FedNow settle the domestic leg while correspondent banks handle the international portion; it would not directly connect FedNow to foreign payment systems or expand participant eligibility. The 60-day comment period closed June 9, with Stripe, Visa, Wise and payments trade groups backing the change and urging the Fed to finalize it promptly.
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