Waller recommended in October that the Fed explore payment accounts to clear and settle certain transaction activities for eligible financial institutions.
Crypto News
The Federal Reserve launched a public comment period Friday on proposed payment accounts that would grant fintechs and crypto companies limited access to central bank payment systems. The accounts, sometimes called skinny master accounts, would operate under a tailored approval framework distinct from traditional banking relationships.
Fed Governor Christopher Waller stated the new payment accounts would support innovation while maintaining payment system safety. Waller recommended in October that the Fed explore payment accounts to clear and settle certain transaction activities for eligible financial institutions.
The central bank is introducing this feature to address the rapid developments in the payments industry, which have led to innovative banking approaches and new business models.
The tailored framework could reduce payment system risk and allow payment account requests to receive streamlined review compared to full master account applications. Payment accounts would not earn interest, access Fed credit, or qualify for the same privileges as master accounts held by major banks and Wall Street institutions. The accounts would face balance caps and additional restrictions.
Fed Governor Michael Barr opposed seeking public input, arguing the proposal could pose risks if safeguards against money laundering and terrorist financing lack clear definition. Barr raised particular concerns for institutions that the Fed does not directly supervise. Not all Fed officials agreed with the decision to move forward with the public comment period.
Several payment-focused crypto firms could connect to Fed banking rails under the new framework. Major U.S.-based crypto payment companies include Circle, Coinbase, Kraken, and Block. Including crypto firms in Fed banking systems would reverse previous industry access challenges.
The comment period will close 45 days after Federal Register publication. Waller stated last month that the payment account feature is expected to become operational in the fourth quarter of 2026. The Fed will review public feedback before finalizing the framework and approval criteria for payment account access.
Crypto companies claimed last year that the Biden administration deliberately cut them from banking services to suppress the industry through what backers called Operation Chokepoint 2.0. Waller noted the Fed has experimented with blockchain-based payment technologies to modernize U.S. payment infrastructure.
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