What to Know:
- The Fed is proposing a new payment account for stablecoin issuers and crypto firms, granting direct access to Fed payment rails.
- This “skinny” master account would provide Fedwire and ACH connectivity without interest payments or overdraft facilities.
- The move signals a shift toward integrating crypto into the traditional financial system under regulatory supervision.
The Federal Reserve is exploring new avenues for integrating digital assets into the traditional financial system, as evidenced by Governor Christopher Waller’s recent proposal for a new payment account tailored for stablecoin issuers and crypto firms. This innovative approach would grant these entities direct access to the Fed’s payment rails, potentially reshaping how dollar flows are settled within the crypto ecosystem. This move signals a significant evolution in the relationship between regulatory bodies and the burgeoning digital asset industry.
The proposed “skinny” master account represents a middle ground, offering basic Fedwire and ACH connectivity while excluding certain features like interest payments and emergency lending. For firms like Ripple, Kraken, and Anchorage Digital, which have been pursuing full master accounts, this could translate to faster approval timelines and streamlined operations. This initiative aims to foster innovation in payments while mitigating risks associated with broader financial activities.
“Imagine if Tether didn’t need to rely on a TradFi bank for its existence. The Fed is moving to destroy commercial banking in the US.”
Direct Fed access would position compliant US stablecoins closer to narrow money, reducing bank-run risk. The operational improvements, such as faster redemption flows and reduced dependency on bank hours, could be material during periods of high volume. The Fed’s goals of controlling balance sheet impact and limiting credit exposure will shape balance caps, with issuers weighing direct Fed access for a slice of reserves versus holding everything with commercial banks.
The introduction of federal stablecoin requirements via the GENIUS Act in July 2025, coupled with Waller’s recent proposal, fills a crucial gap by granting direct Fed access. This could lead to faster decisions for firms with pending applications, potentially starting with banks with payment subsidiaries before expanding to crypto-native fintechs as the framework solidifies. This formalizes crypto’s entry into Fed-supervised infrastructure, making the impact on liquidity and settlement quality systemic.
As the digital asset landscape continues to mature, this policy shift integrates crypto into the payments system under supervision, with direct settlement reducing fragility. It recognizes that digital asset infrastructure has moved from the fringes to the core of how dollars move, signifying a pivotal moment for the industry’s acceptance and integration into mainstream finance.
Source: Original article
