REGULATION | The Federal Reserve Proposes Giving Crypto Firms Limited Access Central Bank Payment Infrastructure

The U.S. Federal Reserve has proposed creating a new class of limited payment accounts that would give fintech and crypto firms restricted access to the central bank’s payment infrastructure marking the latest shift in Washington’s approach to digital asset companies seeking banking services.

The proposal would allow eligible firms to access Federal Reserve payment rails and transfer funds directly through the system but without many of the privileges granted to traditional banks. The accounts would not provide access to intraday credit, interest on reserves or the Fed’s discount window, according to the proposal.

Firms with diverse business models can use such accounts to clear and settle payments to increase speed and reduce their costs, but without master-account status.

The move builds on an idea first floated last year by Federal Reserve Governor, Christopher Waller, for so-called ‘skinny’ master accounts aimed at firms that do not require the full suite of banking services.

Crypto firms and fintech companies have long pushed for access to Fed master accounts arguing that direct access to payment rails would reduce settlement costs and improve transaction speeds. Traditional banks have opposed such efforts citing concerns about regulatory oversight and financial stability risks tied to firms that lack federal deposit insurance.

The proposal comes weeks after crypto exchange, Kraken, became the first crypto-linked firm to secure a limited Federal Reserve master account through the Kansas City Fed, a development analysts said could pave the way for additional approvals across the sector.

The Fed said the proposal would not alter the legal eligibility requirements for account holders and noted that regional reserve banks would pause pending applications from non-traditional firms while the framework is reviewed.

The announcement also follows an executive order signed this week by U.S. President Donald Trump directing financial regulators and the Federal Reserve to review policies that may restrict fintech and crypto firms from accessing payment systems.

Federal Reserve Governor, Michael Barr, dissented from the proposal warning that expanding access without stronger safeguards could increase risks tied to illicit finance and regulatory arbitrage.

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