The Federal Reserve has opened a new front in the increasingly contentious debate over crypto firms’ access to the U.S. financial system. On Wednesday, the central bank proposed a new type of “payment account” that would allow eligible fintech and digital asset firms to clear and settle payments through the central bank without granting them full Federal Reserve master accounts.
The proposal, announced in a Federal Reserve Board press release, would create a more limited pathway into the Fed’s payments infrastructure for institutions that may not qualify for traditional banking privileges but still seek direct access to the nation’s core payment rails.
The move comes just days after President Trump signed an executive order directing federal financial regulators, including the Federal Reserve, to review rules and supervisory practices that may be restricting crypto and fintech firms’ access to payment systems, bank charters and other regulatory approvals, Decrypt reported.
Together, the actions signal mounting political and regulatory pressure on the Fed to accommodate crypto-native financial firms while attempting to preserve the central bank’s traditional risk controls and institutional independence.
Under the Fed proposal, legally eligible financial institutions could open “payment accounts” for the “specific purpose of clearing and settling their payments,” according to the press release. The accounts would not provide the full range of benefits associated with master accounts, which historically have been reserved for banks and other tightly regulated institutions.
Instead, the Fed said payment account holders would be barred from accessing intraday credit or the Fed’s discount window, would not earn interest on balances held at Reserve Banks, and would be subject to automated controls designed to prevent overdrafts.
The central bank also stressed that the proposal “would not expand or otherwise change legal eligibility for access to accounts or payment services,” while emphasizing that Reserve Banks would continue to expect account holders to mitigate illicit finance risks.
The Fed framed the proposal as a response to rapid changes in the payments sector and growing demand from institutions with “an increasingly wide range of business models” seeking direct access to Federal Reserve payment services in order to reduce costs and accelerate settlement speeds. Many of those institutions are not federally insured, a distinction that has historically complicated their efforts to obtain master accounts.
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Master accounts are accounts held at the Fed that allow banks and other eligible institutions to settle payments directly through the central bank, rather than relying on another bank to move money through the system.
Per Decrypt, the issue has become especially important for crypto firms seeking to move stablecoins and tokenized assets more efficiently through the traditional financial system.
Trump’s executive order specifically instructed regulators to determine within 120 days whether nonbank financial firms, including digital asset companies, should gain direct access to Federal Reserve payment accounts. The order also called for eliminating “overly burdensome and fragmented regulations and supervisory practices that form barriers to entry and primarily benefit incumbent financial services firms.”
The administration’s intervention intensified a long-running dispute over how much discretion the Fed should retain over access to its payments network.
Industry observers said the White House’s involvement represented an unusual political intrusion into what traditionally has been treated as a supervisory and risk-management issue for the central bank.
“The pressure is somewhat real but it operates through optics, not any legal forcefulness,” Luke Nolan, senior researcher at CoinShares, told Decrypt. “A public 120-day report deadline puts the Fed in a position where any denial has to be defended out loud.”
The Fed’s latest proposal appears designed to thread that political needle by offering a narrower form of access without fully opening the door to unrestricted master accounts for crypto firms.
The proposal builds on an earlier Federal Reserve request for information issued in December 2025 regarding so-called “skinny” master accounts tailored to payment settlement activities.
The Fed has already begun cautiously expanding access. According to Decrypt, the Kansas City Fed approved a “limited purpose account” for Payward, parent company of crypto exchange Kraken, earlier this year.
The public comment period on the payment account proposal will remain open for 60 days after publication in the Federal Register.
