Fed Explores New Accounts to Expand Access to Payments Network

The Federal Reserve is exploring the creation of “payment accounts”  that could give smaller fintech and crypto firms access to its payment system, a move that could reshape how non-bank players participate in the financial network.

Speaking at the Fed’s Payments Innovation Conference, Governor Christopher J. Waller said the proposed accounts, which are described as “skinny master accounts”, would allow eligible companies to connect directly to the Fed’s payment rails while managing potential risks to the broader system.

“I believe we can and should do more to support those actively transforming the payment system,”  Waller said, adding that he has asked Fed staff to develop the proposal further.

Currently, only large banks and select financial institutions have direct access to the Fed’s payment services through “master accounts,” which offer benefits such as earning interest and overdraft facilities.

Whereas smaller fintech and crypto firms typically rely on third-party banks to process payments, creating barriers to growth and innovation.

Therefore, the new payment accounts would give these firms a more direct route to conduct transactions securely and efficiently, potentially leveling the playing field.

While the idea remains in its early stages, it marks a notable shift in the Fed’s stance toward digital finance. Waller said technologies like distributed ledgers and digital currencies are now “increasingly woven into the fabric of the payment and financial systems,” underscoring the need for more inclusive participation.

If implemented, the proposal could help bridge the gap between traditional finance and emerging digital players, potentially easing long-standing challenges for crypto firms seeking stable access to the banking system.