U.S. Fed proposes ‘skinny master accounts’ for crypto firms

The ￰0￱ Reserve Governor proposed giving cryptocurrency and fintech firms direct access to the central bank’s payment rails on October ￰1￱ proposal intends to blur the lines between crypto , fintech, and traditional ￰2￱ at the Federal Reserve’s first Payments Innovation Conference in Washington, Governor Christopher ￰3￱ announced the proposal of a “skinny master account,” a limited-access version of the accounts banks use to move money through the Fed’s payment rails. “This is a new era for the Federal Reserve in payments—the DeFi industry is not viewed with suspicion or scorn,” Waller said, acknowledging that distributed ledgers and crypto-assets are a part of the financial ￰4￱ are “skinny master accounts”?

The so-called “skinny master accounts” are essentially trimmed-down versions of conventional master ￰5￱ the U. S., a master account is a bank’s or financial institution’s account held directly at the Federal ￰6￱ conventional accounts act as the central hub for its reserves and ￰7￱ accounts would offer limited access to the Fed’s payment infrastructure but come with tight ￰8￱ accounts would not accrue interest, may be subject to balance limits, and would not qualify for overdrafts or access to the discount ￰9￱ streamlined structure would also speed up the review process for firms seeking ￰10￱ added: “Payments innovation moves fast, and the Federal Reserve needs to keep up.” How crypto firms could benefit For crypto-native fintechs and stablecoin issuers, this is a pivotal ￰11￱ rely on partner banks to settle transactions through the ￰12￱ rail, but that route is expensive and ￰13￱ Fed access, even in a limited form, would let blockchain-based businesses access cheaper and secure payments with the long-sought legitimacy they ￰14￱ proposal reflects a broader evolution in the Fed’s ￰15￱ skeptical of crypto and decentralized finance ( DeFi ), the central bank is now engaging with it directly, researching tokenization , smart contracts, and AI as part of its own modernization ￰16￱ the “skinny account” remains a “prototype idea” under study, it signals a clear message that the central bank sees a future where crypto and traditional finance share the same rails.