Federal Reserve Payment Account Signals a Shift Toward Crypto Inclusion
The Federal Reserve payment account proposal is drawing intense attention from fintech and crypto firms, as it could offer a rare pathway to connect directly with the US central bank—without meeting the full regulatory burden required for traditional master accounts.
The Fed is now seeking public feedback on the initiative, officially described as a “payment account” but widely referred to as a “skinny master account.” According to Fed Governor Christopher Waller, the concept is designed to support innovation while preserving the safety and stability of the US payments system.
Why the Federal Reserve Payment Account Matters
Waller explained that the Federal Reserve payment account reflects rapid changes across the payments industry, where new technologies and business models are reshaping how money moves.
“These new payment accounts would support innovation while keeping the payments system safe,” Waller said, noting that tailored access could lower systemic risk and allow applications to move through a more streamlined review process.
The proposal would allow eligible institutions to clear and settle specific transaction activities directly with the Fed, potentially reducing reliance on intermediary banks.
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Crypto Firms Could Gain Direct Access to Fed Payment Rails
If implemented, the Federal Reserve payment account could significantly strengthen the bridge between crypto and traditional finance.
Several major US-based crypto payments firms—including Circle, Coinbase, Kraken, and Block, Inc.—could be positioned to benefit. Direct access to Fed infrastructure would mark a dramatic reversal from recent years, when crypto companies argued they were systematically cut off from banking services under what critics labeled Operation Chokepoint 2.0.
Waller also confirmed that the Fed has already been experimenting with blockchain-based payment technologies, signaling a broader effort to modernize the US payments ecosystem.
Federal Reserve Payment Account Comes With Strict Limits
Despite the opportunity, the Federal Reserve payment account would not grant crypto or fintech firms the same privileges enjoyed by major banks.
Key limitations include:
- No interest paid on balances
- No access to Federal Reserve credit facilities
- Balance caps and operational restrictions
These safeguards are designed to ensure that payment accounts remain narrowly focused on settlement activities rather than full-scale banking services.
Internal Fed Pushback Highlights Regulatory Tensions
Not all Federal Reserve officials support the proposal. Governor Michael Barr raised concerns that granting payment accounts without clearly defined safeguards could expose the system to money laundering and terrorist financing risks, particularly for firms outside direct Fed supervision.
Barr warned that strong compliance standards must be firmly established before expanding access to the central bank’s infrastructure.
What Comes Next for the Federal Reserve Payment Account
The public comment period for the Federal Reserve payment account proposal will remain open for 45 days after publication in the Federal Register.
According to Waller, if approved, the payment account framework is expected to become operational in Q4 2026—potentially setting the stage for a new era of regulated crypto-enabled payments in the United States.
