The U.S. Federal Reserve Board has formally requested public feedback on a proposal to create a new class of “payment accounts” that would allow eligible financial firms — including some crypto and fintech companies — direct access to Federal Reserve payment systems for clearing and settlement, while maintaining safeguards and limitations distinct from traditional banking privileges. The move reflects the central bank’s effort to modernize its payment infrastructure and support innovation while managing risk.
What the Fed Is Proposing
In a Request for Information (RFI) published Dec. 19, the Federal Reserve said it is exploring a payment account prototype tailored to institutions needing access to Fed payment services — such as Fedwire and FedNow — for basic payment processing and settlement purposes. These accounts would be distinct from full master accounts currently held by banks and certain depository institutions, featuring limitations designed to protect the broader financial system.
According to the Fed, these payment accounts would:
- Not earn interest on balances held at the Fed
- Not provide access to Fed credit or discount window borrowing
- Be subject to balance limits and risk controls
- Support a streamlined review process for eligibility and oversight
The new accounts aim to make direct central bank payment infrastructure access more accessible to innovative firms without granting them the full suite of services and privileges currently reserved for traditional banks.
Why This Matters
Currently, only federally regulated banks and certain financial institutions with master accounts can directly connect to the Fed’s payment systems. Companies that don’t qualify — such as many crypto firms, stablecoin issuers, and fintech startups — must rely on partner banks to access core banking functions, adding complexity and cost to their operations.
By creating a separate payment account category, the Fed could reduce barriers to entry for these firms, accelerating innovation and competition in the U.S. financial system while promoting efficient and secure payment infrastructure use.
Federal Reserve Governor Christopher J. Waller described the initiative as a key step in making the central bank “responsive to how payments are evolving” and supporting innovation without compromising system safety.
Industry and Political Response
The concept — informally referred to as a “skinny master account” — has drawn attention in payments and crypto communities as a potential breakthrough. Firms like Ripple and Circle could benefit from more direct access to central banking infrastructure, especially after years of relying on intermediary banks to clear and settle transactions.
Crypto-friendly lawmakers, including Senator Cynthia Lummis (R-Wyo.), praised the Fed’s request for information as a positive step toward integrating innovative payment technologies into mainstream financial systems.
However, some financial industry observers caution that expanding access must be balanced with risk management and system integrity, particularly as participation by non-bank entities could raise concerns around oversight, compliance, and financial stability.
Next Steps: Public Comment Period
The Federal Reserve’s RFI invites comments from a wide range of stakeholders — banks, fintech firms, crypto companies, academics, consumer groups, and the public — and will remain open for approximately 45 days after publication in the Federal Register. Feedback will help shape the design, eligibility criteria, and operational framework for the proposed payment accounts.
The Fed has emphasized that the proposal does not alter legal eligibility for full master accounts, but rather offers a new, risk-controlled pathway for eligible institutions to connect directly to core payment services.
Looking Ahead: Innovation and Infrastructure
Analysts say this initiative could mark an important evolution in U.S. payments infrastructure, reducing reliance on bank intermediaries while maintaining central bank neutrality and safety. If adopted, payment accounts may help position the United States at the forefront of global financial innovation — integrating emerging digital payment technologies with traditional payment rails.
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