The Federal Reserve has received feedback from crypto firms and banking trade groups on a proposal to create so-called “skinny master accounts,” which would give fintech companies limited access to the central bank’s payments infrastructure.
The comment period, which closed Friday, drew 44 submissions on the Fed’s plan to offer a new type of “payment account.” Crypto companies largely supported the idea, while banks and banking associations urged a more cautious approach.
When the Fed opened the proposal for public comment in December, Governor Christopher Waller said the payment accounts were necessary in light of “rapid developments” in the payments sector and would “support innovation while keeping the payments system safe.”
Unlike traditional master accounts held by large banks, the proposed payment accounts would not earn interest, provide access to Federal Reserve credit, or allow unlimited balances.
Crypto backs access
In its response, stablecoin issuer Circle said the accounts would “play an important first step in carrying forward Congress’ vision under the GENIUS Act” and argued that the move would “materially strengthen U.S. payments.”
The newly formed Blockchain Payments Consortium described the proposed accounts as an “overdue and much-welcomed addition,” arguing they would “eliminate uncompetitive practices that undercut consumers and concentrate risk around a handful of banks.”
Anchorage Digital Bank, the nation’s first federally chartered crypto bank, said the proposal contains “specific deficiencies,” citing concerns around overnight balance limits, the absence of interest on reserves, and the lack of access to the Fed’s automated clearing house.
Under the proposal, the Fed suggested capping overnight balances at the lesser of $500 million or 10% of an account holder’s total assets. The accounts would not earn interest, nor would holders gain access to the Fed’s clearing house, which facilitates same-day and international payments.
Banks raise concerns
Several banking trade groups, however, warned against expanding access to the Federal Reserve’s system.
The American Bankers Association said many potential account holders “lack a long-run supervisory track record, are not subject to consistent federal safety-and-soundness standards, and may rely on evolving statutory or regulatory regimes.”
The Wisconsin Bankers Association argued that access “should depend not only on legal eligibility, but also on an institution’s demonstrated capabilities in governance, risk management, internal controls, and compliance.”
Better Markets, a nonpartisan financial reform advocacy group, went further, calling the payment accounts an “irresponsible and reckless giveaway to the crypto industry” and urging the Fed to withdraw the proposal. The group said the accounts would “implicitly and unnecessarily” expand the Fed’s mandate and expose the Federal Reserve System and broader financial system to significant risk.
The Federal Reserve will review the comments before issuing a final rule, a process that could take several months.
