Federal Reserve Explores New 'Payment Accounts' to Ease Crypto Access to Fed Payment Rails
The Federal Reserve has issued a request for information to explore the creation of a new 'payment accounts' option designed to grant access to Fed payment rails with lighter regulatory requirements. This initiative seeks to help cryptocurrency firms use Fed payment systems without the need to obtain full master accounts, which are typically more difficult to acquire.
These proposed payment accounts would be a streamlined version of master accounts, envisioned to support innovation in the payments sector while maintaining system safety. The accounts would not pay interest, would not provide Fed credit, and would impose balance caps. According to a Federal Reserve board memo, these accounts would be expressly used for clearing and settling the institution’s payment activity.
Fed Governor Christopher Waller has endorsed the concept, describing it as a 'skinny' master account and reaffirming his support for the idea, which he initially proposed in October. However, Governor Michael Barr has expressed opposition, citing concerns that the move lacks sufficient safeguards against money laundering and terrorist financing by institutions that are not supervised by the Federal Reserve.
The public has a 45-day window to comment on this proposal as the Fed weighs moving toward these narrower, crypto-driven accounts.
