The Federal Reserve plans to expand the ways in which banks and credit unions can transfer funds.

According to a proposal from the Federal Reserve, banks and credit unions in the United States may soon be able to transfer funds through the central bank's real-time payment system using intermediary institutions. The plan announced by the Federal Reserve on Wednesday will expand the number of US private companies that can use the FedNow platform. Currently, transfers through FedNow are limited to only two US banks. The Federal Reserve stated that the proposal aims to provide "greater flexibility" for banks when conducting transactions with other banks, thereby facilitating the international aspect of cross-border payments. The proposal will still need to be finalized after public consultation. Regulators said this is part of the central bank and other financial regulatory agencies seeking to streamline certain functions of banks and eliminate inefficient processes. The FedNow payment system is scheduled to launch in 2023, with the goal of accelerating the speed of fund transfers between banks in the United States.