What Is FedNow, and Is It a CBDC?

What FedNow does

FedNow is plumbing between banks. When a customer sends an instant payment, the sending bank passes the instruction to FedNow, which settles it within seconds by debiting the sending bank's master account at a Reserve Bank and crediting the receiving bank's. The receiving bank must then make the money available to its customer immediately. That is the whole service, and it runs 24 hours a day, 7 days a week, 365 days a year, including weekends and holidays.

A few features define how it reaches the public:

• No app, no consumer accounts. The Fed states there is no FedNow app and that it does not provide accounts or instant payment services to individuals or businesses. People use FedNow only through a participating bank or credit union, inside that institution's app or website.
• Push payments only. FedNow carries credit transfers, where the payer sends money. A request for payment feature lets a payee ask for money; the payer still sends it.
• Domestic only. It handles payments between US depository institutions and does not support cross-border transfers.
• Receive-only option. Banks may join to receive payments before they offer sending, so a bank's presence on the participant list does not mean its customers can send FedNow payments.

The Fed announced the project in 2019 after public comment periods in 2018 and 2019 and says it spent $545 million to build it. The Fed describes it as similar to its other payment services for banks, Fedwire and FedACH.

Why FedNow is not a CBDC

The money that moves over FedNow is a bank deposit, a claim on the customer's own bank. A central bank digital currency would be a claim on the Federal Reserve itself. Federal law now defines the term: Title XI of Public Law 119-101, which became law on 11 July 2026, describes a CBDC as a digital asset denominated in dollars that is US currency, a direct liability of the Federal Reserve System, and widely available to the general public.

The Fed's own FAQ answers the question directly: FedNow "is not related to a digital currency" and "is neither a form of currency nor a step toward eliminating any form of payment, including cash." The 2026 law goes further than the FAQ. It bars the Fed from issuing a CBDC, or anything substantially similar, "directly or indirectly through a financial institution or other intermediary", which covers a design in which banks would hand out a Fed-issued digital dollar. Executive Order 14178 of 23 January 2025 separately prohibits federal agencies from taking any action to establish, issue or promote a CBDC.

The ban has two limits. It expires on 31 December 2030, and it exempts any dollar currency that is "open, permissionless, and private" and fully preserves the privacy of coins and paper money. Our CBDC and stablecoin tracker follows the law, the executive order and related bills.

How many banks use FedNow, and how much it carries

FedNow launched with 35 early-adopting banks and credit unions plus the Treasury's Bureau of the Fiscal Service. By June 2025 the Fed reported about 1,400 participants, more than 95% of them community banks and credit unions. Federal Reserve Financial Services' participant list dated 26 October 2026 has 1,959 institutions. At launch the Fed said it would work with the more than 9,000 banks and credit unions in the country, so the network still covers well under a quarter of them.

The number of payments in Q3 2026 was 154% higher than a year earlier, while their value rose 21%. The average payment halved, from $122,616 to $58,161, a sign that smaller payments make up a growing share of the traffic. In Q3 2026 FedNow averaged 69,309 payments and $4.03 billion a day. From launch to the end of September 2026 it settled about 24.1 million payments worth about $1.81 trillion.

Transaction limits and fees

FedNow's ceiling has risen twice. Until June 2025 the network limit for a single payment was $500,000. On 24 June 2025 Federal Reserve Financial Services raised it to $1 million, and in a 9 September 2025 announcement it said the limit would rise to $10 million effective November 2025, citing commercial demand.

The network limit is a maximum. Each bank sets its own lower limits for its customers, and since June 2025 banks can also set dollar and frequency thresholds by customer segment, so a bank can hold new individual account holders to tighter sending limits than established business customers. The limit that applies to any one customer is set by that customer's bank.

The Fed charges banks, not consumers. Its 2026 fee schedule lists:

• $0.045 per customer credit transfer, paid by the sending institution, with a discount covering up to 2,500 credit transfers a month in 2026;
• a participation fee of $25 a month per routing number, discounted to $0 in 2026;
• $0.01 per request for payment, and $1.00 per liquidity management transfer between banks.

What a customer pays, if anything, is the bank's decision.

The privacy questions

The Fed states that it "cannot access individuals' bank accounts or control how they choose to spend their money" through FedNow. That follows from the design: the Reserve Banks hold accounts for banks, and the customer accounts stay at the customer's bank.

FedNow does process each payment instruction that banks send through it, in the ISO 20022 message format, as Fedwire and FedACH do for the payments routed over them. The customer's account, balance and history stay at the customer's bank, which remains subject to the same reporting rules as for any other payment. Our guide to cash reporting rules covers what banks must report and when.

Three points answer most of the concerns raised about FedNow:

• Programmable money. FedNow moves deposits from one account to another and leaves the money itself unchanged. The Fed says it cannot control how people choose to spend their money through the service.
• Cash. The Fed says FedNow is not a step toward eliminating cash. Use of cash is a separate trend, covered in our guide to whether cash is going away.
• Speed and fraud. Money that settles in seconds is available to the recipient at once. That helps a paycheck and also helps a scammer, which is why the Fed added account activity thresholds that let banks restrict sending.

The larger privacy question concerns a future Fed-issued digital dollar. Under current law that is off the table until the end of 2030, and only Congress can authorise one.

How to tell if your bank uses FedNow

Federal Reserve Financial Services publishes a list of participating banks and credit unions, with city and state, and updates it regularly; the version dated 26 October 2026 has 1,959 entries. Appearing on the list means the institution can at least receive FedNow payments. Whether customers can send them, and up to what amount, is set by the bank and shown in its own app or terms.

Some banks offer instant payments through a private-sector service instead. The Fed's Q&A says FedNow supports payment routing interoperability with that existing private service. For the customer the difference is mostly invisible: the money still moves from one bank deposit to another.