Anchorage Digital Bank told the Fed its proposed limited payment account cannot replace a master account, citing missing FedACH access, balance caps, and no interest on reserves.
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Anchorage Digital Bank formally objected to a Federal Reserve proposal that would create a limited-purpose payment account, telling the central bank the new structure cannot replace a traditional master account.
In a comment letter submitted this week, the OCC-chartered national trust bank argued that the restricted account preserves many of the frictions direct Fed access is meant to eliminate. The bank supports the broader effort to update eligibility rules. It maintained the payment account falls short for institutions seeking full participation in US payment rails.
Anchorage itself applied for a master account in August 2025, hoping to reduce reliance on correspondent banks for settlement and cash management.
Under the Fed's framework, payment account holders would gain access to Fedwire and FedNow, plus the National Settlement Service, subject to automated safeguards. The design excludes FedACH, the automated clearing house network that handles the bulk of everyday electronic payments by volume. Without FedACH, institutions would still depend on intermediary banks for routine payment activity, the bank said.
Overnight balance caps would force firms to move client funds to third-party banks at the close of business, reintroducing counterparty and operational risks the account is supposed to minimize, according to the letter. The proposal withholds intraday liquidity and pays no interest on balances held at the Federal Reserve. Anchorage contends those restrictions leave payment account holders at a clear competitive disadvantage compared with traditional master account holders.
The bank raised process concerns as well. The current approach could subject federally supervised national trust banks to the same heightened review tier as entities lacking a federal primary supervisor. Anchorage argues that federal supervision, not deposit insurance status, should determine eligibility for the central bank's payment infrastructure.
Some industry groups agree that missing FedACH access and the absence of interest make the accounts commercially impractical. Banking associations have generally endorsed the restrictions as necessary protections for system stability, while calling for even tighter oversight of non-traditional applicants.
The Federal Reserve advanced the payment account concept after an earlier request for information and a formal proposal issued in May 2026. Public comments closed near the end of July.
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