Under a proposal from the Federal Reserve, U.S. banks and credit unions may soon be able to use the central bank's real-time payment system to transfer funds through intermediary institutions.

The plan, announced by the Fed on Wednesday, would increase the number of private U.S. firms that can utilize the FedNow platform. Currently, transfers via FedNow are restricted to transactions between two U.S. banks.

The Fed stated that the proposal aims to offer banks "greater flexibility" when conducting transactions with other banks, thereby facilitating the international segment of cross-border payments.

The proposal still requires a public comment period before it can be finalized. Regulators indicated that this is part of broader efforts by the central bank and other financial overseers to streamline certain banking functions and eliminate inefficiencies.

The FedNow payment system was launched in 2023 with the goal of accelerating the speed of interbank fund transfers in the United States.