Fed seeks input on account options for crypto firms

The US Federal Reserve has opened a public consultation on a proposed “payment account” aimed at fintech and crypto firms.

The account, sometimes described as a “skinny master account,” would offer limited access to the Fed’s payment infrastructure.

The proposal is intended to allow eligible firms to clear and settle payments without obtaining full master account privileges.

Federal Reserve Governor Christopher Waller said the initiative is designed to balance innovation with financial system safety.

These new payment accounts would support innovation while keeping the payments system safe.

Christopher Waller said.

Waller first suggested exploring payment accounts in October as a way to modernise settlement for certain financial institutions.

He said the proposal reflects rapid developments in payments technology and evolving banking business models.

The Fed believes tailoring access could reduce systemic risk compared with granting full master accounts.

Waller said streamlined reviews may be possible if risks to the payments system are lower.

Not all Federal Reserve officials support the move to seek public feedback.

Governor Michael Barr warned that unclear safeguards could raise risks around money laundering and terrorist financing.

Barr said concerns are greater for institutions not directly supervised by the Federal Reserve.

Several crypto payments companies could qualify for the proposed payment accounts.

Firms such as Circle, Coinbase, Kraken and Block Inc are among those that could benefit.

Supporters say the move could strengthen links between crypto businesses and traditional banking infrastructure.

Inclusion in the Fed’s payment system would represent a major shift for the crypto industry.

Crypto firms have previously accused regulators of limiting their access to banking services.

Industry figures have referred to those alleged actions as Operation Chokepoint 2.0.

Waller said the Fed has already been experimenting with blockchain-based payment technologies.

These experiments are part of broader efforts to modernise the US payments system.

The proposed payment accounts would come with significant limitations.

Unlike master accounts, payment accounts would not earn interest.

Account holders would also lack access to Federal Reserve credit facilities.

Balance caps and other restrictions would apply to limit systemic exposure.

The Fed said these limits are intended to differentiate payment accounts from traditional banking access.

The public comment period will remain open for 45 days after publication in the Federal Register.

Feedback from industry participants and the public will inform final design decisions.

Waller said the Fed expects payment accounts to become operational in the fourth quarter of 2026.

Analysts say the proposal signals a cautious but meaningful shift in regulatory posture toward crypto firms.