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Crypto Firms Gain Limited Fed Access Under New Proposal
The Federal Reserve's new payment account gives Wyoming SPDIs and crypto banks a formal application pathway, though no credit or interest. The 60-day comment period is the next catalyst.
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The Federal Reserve Board proposed Wednesday a new payment account type that allows eligible non-bank financial institutions to connect directly to the central bank's payment rails for clearing and settlement. The proposal arrived one day after President Trump signed an executive order directing the Fed to review expanding master account access, suggesting the Board had the framework prepared and was awaiting the political signal.
The account is limited to payment services only. Holders receive no intraday credit, no access to the discount window, no interest on balances held at Reserve Banks, and automated controls prevent overdrafts. The Fed Board stated the structure is designed to "support innovation by serving the clearing and settlement needs of certain eligible institutions while also mitigating material risks to the Reserve Banks and payment system."
December Prototype Refined After Public Comments
The proposal closely follows the prototype outlined in the Fed's December 2025 request for information on "skinny" master accounts. Two adjustments emerged from public feedback:
- Closing balance limits are now tied to an institution's expected payment activity rather than a fixed cap.
- The maximum closing balance was increased from the December version.
The speed of the release – one day after the executive order – indicates the Fed had the proposal ready and needed only the political signal to move forward.
Better Market Read: Controlled Utility, Not Blank Check
A surface-level reading – "Fed opens doors to crypto" – misses the critical constraints. The payment account is a narrow utility, not a gateway to full Federal Reserve membership. The restrictions matter because they limit what a crypto firm can do with the connection.
No intraday credit means the account cannot be used as a liquidity buffer. No discount window access removes the lender-of-last-resort safety net. No interest on balances eliminates any incentive to hold excess cash at the Reserve Bank. Automated overdraft controls prevent the account from running negative, forcing strict settlement discipline.
This structure mirrors the limited master account that Kraken Financial won in March, the first crypto firm to secure direct Fedwire access. Other entities still pursuing similar access – Ripple, Anchorage Digital, and money-transfer firm Wise – now have a defined category to target.
The proposal most directly benefits Wyoming Special Purpose Depository Institutions (SPDIs) and crypto-native banks. These entities have spent years navigating the Fed's ad hoc account access process, often facing delays and inconsistent decisions. Creating a formal tier reduces regulatory uncertainty. The narrow terms mean the accounts are primarily useful for settlement speed and reliability, not for building a credit-heavy business model.