In brief
- The Federal Reserve is seeking public comment on a new, limited “payment account” for crypto and innovation-focused banks.
- The accounts would allow access to Fed payment rails, but not interest, credit, or full master-account privileges.
- The plan is spearheaded by Fed Governor Christopher Waller, a top candidate to replace outgoing Fed chair Jerome Powell.
The Federal Reserve is moving forward with an initiative to offer a more attainable version of its coveted master accounts for crypto banks—and is now asking for public comment on the plan.
In October, Fed Governor Christopher J. Waller first floated the idea of a “skinny” master account for innovation-focused banks. Master accounts are required to operate a bank nationally, and permit an institution to access the Fed’s paymental rails.
The Fed has previously rejected attempts by crypto banks to attain master accounts, citing the potential harm such approvals could pose to the stability of the U.S. banking system.
Today, the central bank announced it is pushing ahead with its “skinny” master account plan—which it is now dubbing a “payment account”. The next step for the concept is a period of public comment, which will be open for the next 45 days.
“These new payment accounts would support innovation while keeping the payments system safe,” Fed Governor Waller said today in a statement. “This request for information is a key first step to ensuring that the Fed is responsive to evolutions in how payments are made.”
The Fed was careful to clarify today that payment accounts should not be considered the same as master accounts. A payment account, for instance, would not allow for accounts generating interest, would not have access to Fed credit, and would likely be subject to balance caps.
Nonetheless, a fast-tracked approval process for crypto banks seeking to access the Fed’s payment rails and operate nationally would constitute a major shift in the central bank’s approach to digital assets—and potentially lead to an explosion of crypto banking in the United States.
State-licensed crypto banks, most notably Custodia, have attempted unsuccessfully for years to gain a master account, and thus the ability to operate nationally.
And even as the Trump administration has eliminated numerous barriers that once separated the traditional and crypto economies, the Fed’s leadership has remained cautious about granting crypto banks the full powers and privileges afforded to major banks.
That last holdout of resistance is likely to change next year, when President Donald Trump appoints a new Fed chair.
Several top candidates for the job—including Waller, the originator of the “skinny” master account concept—have in recent months jockeyed to show their alignment with the president’s agenda. That’s a contrast to the independence-focused tenure of current Fed chair Jerome Powell, who has repeatedly attracted Trump’s ire.
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