The Fed Cracks Open the Vault Door
The Federal Reserve is on the verge of the most significant change to US payment infrastructure in decades. A proposed "payment account," informally called a "skinny" master account, would give non-bank financial firms, including crypto companies, limited but direct access to the Fed's payment settlement systems.
The concept originated with Fed Governor Christopher Waller, who first recommended exploring payment accounts in October 2025 and has since pushed for operational rollout by Q4 2026. The public comment period closed on February 6, 2026, and the responses reveal a sharp divide between fintech advocates eager for direct access and a banking lobby determined to keep the gates closed.
Phil Goldfeder, CEO of the American Fintech Council, put it bluntly: "A well-designed payment account can expand competition and responsible innovation in payments without introducing new risk."
What a Skinny Account Actually Does
The proposed payment account is deliberately limited. It is not a full master account. Holders would get access to Fedwire Funds Service, National Settlement Service, FedNow, and limited Fedwire Securities. But they would face hard constraints:
- Overnight balance cap: The lesser of $500 million or 10% of total assets
- No interest earned on balances
- No discount window access, meaning no emergency Fed lending
- No ACH rail access, keeping the bulk of consumer payment routing with banks
- Streamlined review process rather than the full master account gauntlet
The design intentionally strips out the features that make traditional master accounts powerful, and risky. No lending authority, no deposit-taking functions, no full balance sheet exposure. What remains is pure settlement: the ability to move money through the Fed's pipes without a bank standing in between.
For crypto firms, this is the critical unlock. Today, companies like Coinbase, Circle, and Kraken must route payments through sponsor banks. That dependency adds cost, introduces settlement delays, and creates a single point of failure that banks have historically weaponized through de-banking.
The Fintech Coalition Shows Up in Force
The comment period drew heavy participation from fintech trade groups. The Financial Technology Association, whose members include eBay, Klarna, and Amazon Pay, submitted comments on February 6 calling the payment account a "catalyst to supercharge the benefits of fintech innovation."
But even supporters want changes. The FTA's CEO Penny Lee argued that the current design "includes certain restrictions that would inadvertently undercut key policy objectives." The ACH exclusion, in particular, drew criticism because it forces fintechs to maintain bank relationships for the most common payment type in America.
The Blockchain Payment Consortium went further. It called the $500 million overnight cap "unduly restrictive" for a $4 trillion digital asset market and proposed a 30-40% increase. The group also pushed for full Fedwire Securities access, including Transfer Against Payments functionality, arguing that "commercial banks lack the proper economic and commercial incentives" to serve crypto-native firms.
Why Banks Are Pushing Back Hard
Seven banking trade groups, including the American Bankers Association, Bank Policy Institute, and Independent Community Bankers of America, requested a 30-day extension to the comment period, citing insufficient time for analysis.
Their core argument is straightforward: giving uninsured, lightly supervised institutions direct access to the Fed's balance sheet increases systemic risk. The Bank Policy Institute, The Clearing House Association, and the Financial Services Forum issued a joint warning that payment accounts could increase "run risk" by supporting deposit-like activity outside the federal safety net.
Banks explicitly flagged stablecoin issuers and crypto-linked institutions as the most likely beneficiaries of the new accounts. Their concern is that stablecoin reserves held directly at the Fed would draw customer funds away from traditional banks, effectively disintermediating the banking system one settlement at a time.
Fed Governor Michael Barr echoed some of these concerns, raising questions about anti-money laundering and terrorist financing safeguards for institutions outside direct Fed supervision.
What This Means for Crypto Payments Infrastructure
If the Fed moves forward on Waller's timeline, payment accounts could be operational by Q4 2026. The implications for the crypto payments ecosystem are significant.
First, crypto card issuers currently pay a premium for banking partnerships. Every time a card transaction settles, it passes through a sponsor bank that extracts fees for the privilege. Direct Fedwire access would allow card issuers to settle in central bank money, reducing both cost and counterparty risk.
Second, FedNow access is the real prize for real-time settlement. Crypto-to-fiat conversions that currently take hours could settle in seconds. For stablecoin-backed cards, this could close the gap between "spending crypto" and "spending dollars" entirely.
Third, the de-banking problem that plagued the industry during Operation Chokepoint 2.0 becomes structurally harder to repeat. When crypto firms have their own Fed accounts, no single bank can cut off their access to the payments system. That resilience matters for every company building self-custody wallets and non-custodial spending products.
The Bigger Picture: Settlement Without Permission
This proposal sits at the intersection of two forces reshaping finance. The first is the Fed's own modernization push, with FedNow still gaining adoption and real-time settlement becoming the expectation rather than the exception. The second is the crypto industry's maturation from speculative trading toward payments infrastructure.
The banking lobby's resistance is understandable. Direct Fed access for fintechs and crypto firms erodes the monopoly that banks have held over US payment rails since the Fed's founding. But the proposal's design, stripped of lending and deposit-taking, suggests the Fed is trying to thread a needle: open the pipes without opening the floodgates.
Governor Waller's own framing is telling: "The goal here, assuming nothing goes haywire, is to have these up and operationalized by the fourth quarter of 2026."
That caveat, "assuming nothing goes haywire," acknowledges the political minefield ahead. But with fintech trade groups, crypto companies, and even the Fed's own governors aligned on the direction, the question is less about whether skinny accounts happen and more about how much the banking lobby can limit them.
FAQ
What is a Fed skinny master account? A limited Federal Reserve account that lets non-bank firms settle payments directly through Fedwire and FedNow, without the full privileges (or risks) of a traditional master account. It caps balances, pays no interest, and blocks discount window access.
Which crypto companies could benefit? Companies like Circle, Coinbase, Kraken, and stablecoin issuers are among the most likely applicants. Any firm that currently relies on sponsor banks for payment settlement could benefit.
When would skinny accounts go live? Fed Governor Christopher Waller has targeted Q4 2026 for operational launch, pending the outcome of the comment review process.
Does this replace the need for a bank? Not entirely. ACH access is excluded, meaning fintechs still need bank partners for direct debit and payroll-type payments. But for wire transfers and real-time settlement, the bank middleman becomes optional.
Overview
The Federal Reserve's proposed payment accounts represent a structural shift in who gets to access US payment rails. Fintech trade groups showed up in force during the comment period, calling the accounts a catalyst for innovation. Banking groups pushed back hard, flagging run risk and stablecoin concerns. If Governor Waller's Q4 2026 timeline holds, crypto firms could settle payments directly through Fedwire and FedNow without a sponsor bank for the first time. For the crypto payments industry, this is the most consequential infrastructure proposal since FedNow itself.
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