The Federal Reserve is discussing a proposal to give fintechs and crypto platforms direct access to payment rails, ending their reliance on banks.
Summary
- Federal Reserve’s new proposal could end crypto’s reliance on partner banks
- The skinny master account would enable direct access to Fed’s payment rails
- These accounts would still offer no interest or emergency borrowing
The U.S. Federal Reserve may soon roll out a system that fundamentally changes how crypto firms interact with TradFi. During the Fed’s Payments Innovation conference on Tuesday, Oct. 21, Governor Christopher Waller outlined a proposal to enable fintechs and crypto platforms to tap directly into its core infrastructure, reducing their reliance on banks.
Waller’s proposal centers on opening the Fed’s payment rails to companies without banking charters, with what he called “skinny master accounts.” These accounts would come with some benefits that traditional master accounts offer to banks, but with important limitations.
Notably, fintechs would get access to Fedwire and ACH payment rails, the ability to hold reserves with the Fed, as well as faster settlement. However, the accounts would not enable them to earn interest or give them access to the Fed’s discount window.
How Fed could let crypto firms bypass banks
So far, fintech and crypto platforms relied on banks with master accounts to access the core U.S. payments infrastructure. This has led to the issue of debanking. Namely, crypto firms found it difficult to find banks that would do business with them, with most banks finding their business “too risky.”
The new “skinny master accounts” could make stablecoin issuers and fintechs much less reliant on banking intermediaries, said Jamie Elkaleh, chief marketing officer at Bitget Wallet for crypto.news. The system could also enable a more efficient bridge between crypto and the traditional payment system.
“Fed could lower operational barriers and unlock billions in tokenized asset flows over the short term. Over time, enhanced stablecoin utility for seamless U.S. payments may reshape financial market structures toward hybrid TradFi–DeFi ecosystems,” Jamie Elkaleh, Bitget Wallet.
