U.S. fintech trade groups are urging the Federal Reserve to advance a proposal that would give certain non-bank firms limited direct access to core payment rails, reopening debates over risk and crypto exposure.
The push, led by the American Fintech Council, centres on a narrowly scoped Federal Reserve payment account that would allow eligible firms to clear and settle payments without full banking privileges.
“A well-designed payment account can expand competition and responsible innovation in payments without introducing new risk,”
Said American Fintech Council chief executive, Phil Goldfeder.
Under the proposal, the account would cap overnight balances, pay no interest, bar access to the discount window, and limit activity to settlement systems such as Fedwire and potentially FedNow.
Fintech groups argue the current reliance on sponsor banks raises costs, slows settlement, and concentrates operational risk, while a limited account could offer direct access without lending or deposit-taking powers.
Bank trade groups, including the Bank Policy Institute, warn the plan could heighten run risk and financial instability by enabling uninsured or lightly supervised firms to connect directly to the Fed’s balance sheet.
Although the proposal does not explicitly reference crypto, banks say stablecoin issuers and crypto-linked firms would likely benefit, a concern underscored by the ongoing legal dispute involving Custodia Bank over access to Federal Reserve accounts.