The Federal Reserve is expanding the FedNow Service to support cross-border payments, transitioning the platform beyond its original domestic-only scope. Mechanism: Rather than handling foreign exchange directly, FedNow settles the U.S. dollar leg 24/7/365, handing off the international leg to correspondent banks under updated Regulation J rules and ISO 20022 messaging standards. Target Applications: Enables real-time corporate treasury operations, cross-border payroll, urgent trade supplier remittances, and weekend/after-hours disbursements. Impact: Eliminates domestic settlement delays in cross-border flows, providing a faster, continuous alternative to legacy batch systems and competing with alternative private clearing rails.
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