Federal Reserve expands FedNow to support cross-border payments

The Federal Reserve is expanding its FedNow instant payments network to include cross-border capabilities. This development allows financial institutions to utilize FedNow for the United States portion of international transactions, while leveraging existing correspondent banking relationships to manage the overseas segments.

Initial applications for this service include international payroll, corporate payments for global enterprises, insurance claims, and treasury management. Nick Stanescu, FedNow’s chief executive, stated that these capabilities provide financial institutions with new ways to serve internationally active customers and represent a significant step toward meeting global needs after years of domestic market growth.

While the service is not yet fully live, a select group of organizations will begin testing the US leg of cross-border payments in the coming weeks. The move is seen as a way to strengthen regulated, bank-centric infrastructure in response to the growing momentum of stablecoins in the international payments sector.