Key Takeaways
- FedNow has grown to roughly 1,700 participating financial institutions as the Federal Reserve looks beyond purely domestic instant payments.
- A proposed rule would allow banks to combine FedNow with intermediary banks for cross-border transactions, using FedNow to settle the US leg of the transaction within seconds.
- The expansion moves traditional banking infrastructure closer to a problem Ripple and XRP have targeted for years, although FedNow would still rely on intermediaries rather than XRP as a bridge asset.
The Federal Reserve is pushing FedNow beyond its original domestic payments model, potentially bringing instant settlement into cross-border transactions as adoption among US banks and credit unions accelerates.
FedNow allows participating institutions to send and receive payments within seconds, 24 hours a day, seven days a week. Federal Reserve Financial Services now lists roughly 1,700 participating financial institutions, up sharply from just 35 when the network launched in July 2023.
The next target is international payments.
The Fed has proposed changing the regulation so FedNow participants can use intermediaries, such as correspondent banks, when processing transactions. That would allow FedNow to settle the US portion of an international payment while another institution handles the overseas leg.
It does not turn FedNow itself into a global payment network. But it starts bringing instant central-bank settlement closer to the cross-border market that blockchain payment companies have spent years trying to disrupt.
FedNow Opens the Door to Cross-Border Payments
Under the existing framework, a FedNow funds transfer can involve only two US banks.
The proposed change would allow an intermediary to sit between institutions. For an outbound payment, for example, a US bank could use FedNow to send money instantly to a US correspondent bank, which would then complete the international portion through its overseas network.
The same architecture could support incoming payments, with FedNow handling the final domestic movement of funds to a US bank.
Major banking groups have already responded to the proposal. The Clearing House Association and Bank Policy Institute specifically addressed how inbound international payments using FedNow would need to handle sanctions screening and other compliance checks.
The rule remains a proposal, however. It should not yet be described as FedNow offering direct international settlement.
Does FedNow Threaten XRP’s Cross-Border Use Case?
The expansion creates a clearer competitive overlap with Ripple and XRP.
Ripple has long pitched XRP as a bridge asset for moving value between currencies without requiring institutions to maintain pre-funded accounts across every payment corridor. Ripple says XRP can bridge currencies and settle in roughly three seconds.
FedNow attacks part of the same problem from inside the banking system.
If banks can combine instant FedNow settlement with existing correspondent relationships, they may be able to make cross-border payments faster without introducing XRP into the transaction.
But the architectures remain fundamentally different.
FedNow handles dollars between eligible US institutions. Under the Fed’s proposal, an intermediary would still be needed for the international leg. XRP, by contrast, is designed to function as a neutral bridge between different currencies and payment systems.
Ripple is also moving beyond an XRP-only model. Ripple Payments now supports settlement using fiat and stablecoins, including RLUSD, USDC, and USDT, while transactions can also move across the XRP Ledger.
1,700 Banks Change the Competition
FedNow’s advantage is distribution.
Rather than persuading banks to adopt a new blockchain or hold a bridge asset, the Federal Reserve is extending infrastructure that US financial institutions already use.
That does not make XRP redundant. FedNow still does not solve the entire international transaction itself.
But with roughly 1,700 institutions now connected, the competitive question for XRP is becoming sharper: if existing bank rails can deliver near-instant domestic settlement and increasingly connect that speed to international payments, where is a bridge asset still necessary?
That is the question Ripple will increasingly have to answer as FedNow moves closer to the cross-border market.
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Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
