Federal Reserve must review master account access for non-bank firms within 180 days. Kraken's Wyoming SPDI model may become the new crypto banking template.
President Donald Trump signed an executive order on Tuesday directing federal regulators to rewrite rules that separate digital assets from the traditional banking system. The order gives the chiefs of financial regulators three months to identify laws, guidance, and procedures that unfairly block fintech companies from partnering with federally insured banks. Within six months, regulators must take action to remove those barriers.
The directive is the clearest signal yet that the White House wants cryptocurrency firms operating inside the existing payment infrastructure. The mechanism matters more than the intention. Regulators control the timeline, the scope of changes, and which firms actually gain access.
Regulators must evaluate their existing rules within 90 days. The assessment covers statutes, documents, guidance, and procedures that restrict fintech-bank partnerships or treat non-bank payment providers differently from traditional institutions.
The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve must each submit findings. The Treasury Department is also involved in coordinating the response.
If a regulator determines its own rules block innovation, it must propose replacements or modifications. The order does not specify penalties for inaction. That gap leaves room for regulators to complete the evaluation without implementing binding changes.
The order directs the Federal Reserve Board of Governors to examine the current system for providing payment accounts and services to non-bank financial enterprises and uninsured depository institutions. That includes a specific legal question: whether the twelve regional Federal Reserve banks have the authority to issue payment accounts independently of the Board.
Key insight: The order does not mandate that the Fed open master accounts to every crypto firm. It mandates a review. The outcome depends on how the Board interprets its own statutory capacity and whether it chooses to centralize or delegate the decision.
Special purpose depository institutions (SPDIs) – state-chartered entities that hold fiat deposits without full FDIC insurance – stand to benefit most from the review. Kraken, the crypto exchange, already operates a Wyoming SPDI and earlier this year gained limited access to a Federal Reserve Bank of Kansas master account.
Kraken's master account is restricted. The exchange can access the Fed's payment system only for specific functions. Full access would allow Kraken to settle payments directly with the Fed, reducing reliance on correspondent banks. Other firms with SPDI charters have requested similar access but face an uncertain application process.
The Federal Reserve announced a plan in December to create a formal "skinny" master account for certain non-bank entities. The executive order effectively raises the priority of that project. A formalized skinny master account would standardize the application process and remove the need for case-by-case approvals by regional Fed banks.
Risk to watch: If the skinny master account criteria favor large, well-capitalized applicants, smaller crypto firms could end up locked out of the same infrastructure the order was meant to open.
Within 180 days, regulators must implement measures to promote innovation. The first concrete requirement is a Fed report on payment account access for non-bank firms.
The evaluation must determine:
That report will determine whether a state-chartered SPDI can obtain a master account without navigating a separate application process for each regional bank. A favorable report would validate the Wyoming SPDI model and likely accelerate similar applications from Paxos, Apex Crypto, and other crypto firms with state trust charters.
The order requires coordination among the OCC, FDIC, Federal Reserve, and Treasury. Each agency has its own statutory mandate and regulatory culture. The OCC has historically been more receptive to fintech charters. The FDIC has taken a stricter stance on crypto-related deposits. The order does not override those differences. It asks the agencies to find common ground within six months.
The executive order does not mention stablecoins or a central bank digital currency. The structure it creates could influence both.
If the Fed expands master account access to non-banks, stablecoin issuers that hold reserves in a master account would have a more direct connection to the Fed's payment system. That reduces settlement risk compared to relying on correspondent banks. The Tether (USDT) and Circle (USDC) business models depend on the ability to redeem tokens for fiat on demand. Direct Fed access would reduce the operational risk embedded in their current bank partnerships.
Bottom line for traders: A Fed report that explicitly includes stablecoin issuers in the master account framework would reduce counterparty risk for USDC and potentially increase demand for tokenized dollar products.
Separately, US officials have been quietly exploring CBDC infrastructure despite Trump's earlier executive order banning a retail digital dollar. The current order's push for faster integration of digital assets into existing banking rails could complement that work. The overlap is the master account layer. If the Fed develops a technical standard for non-bank access to its payment system, that standard could apply to both private stablecoins and a potential wholesale CBDC.
US officials quietly explore CBDC structure despite Trump ban
Crypto firms that rely on state-chartered trust companies and limited-purpose banks face execution risk. If the Fed's skinny master account criteria favor large applicants with proven compliance records, smaller firms could end up excluded. The order does not guarantee equal access. It guarantees a review.
The order does not change current regulatory enforcement. The SEC and CFTC retain their existing authority. The order's scope is limited to banking access, not securities classification or commodities oversight. Traders should watch for any language in the Fed's report that crosses into those territories.
For now, the crypto market analysis context is this: the order increases the probability that Kraken's master account model becomes the industry template. What it does not do is remove the execution risk embedded in every regulatory timeline. The real market impact will depend on whether the Fed and other regulators produce binding rule changes within the six-month window and whether those changes treat all digital asset firms equally or create a two-tier system.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.