In a groundbreaking announcement at the Payments Innovation Conference on October 21, 2025, Federal Reserve Governor Christopher J. Waller revealed that the Fed is examining a novel type of account designed for non-bank firms to directly connect with the central bank’s payment system. Dubbed a “payment account” or informally referred to as a “skinny” master account, this initiative aims to expand access for financial technology and cryptocurrency companies.
What The Federal Reserve Is Proposing
The proposed plan intends to provide limited access rather than full banking privileges. These accounts are expected to be devoid of interest earnings and will not grant access to the Fed’s discount window. Additionally, the framework may include balance caps and other risk management measures to ensure stability. Waller emphasized that the concept is still in the exploratory phase, with further details yet to be finalized.
Limits And Safeguards
In a bid to maintain regulatory oversight, the Federal Reserve has indicated that only “legally eligible” entities will qualify for these payment accounts. However, the term leaves ambiguity regarding which specific corporate structures—including trust companies and state-chartered firms—will be permitted to apply.
🌊 Fed opens the gates for fintech and crypto access
Federal Reserve Governor Christopher Waller revealed today that the Fed is studying a new model of “payment accounts”. Streamlined accounts that would allow fintech and crypto firms to access the Fed’s payment infrastructure,… https://t.co/QphKaopcRo
— StrongSHx (@StrongSHX) October 21, 2025
Reports suggest that these accounts will have a smaller scope compared to traditional master accounts, incorporating explicit restrictions to minimize exposure to the payment system. Any application process is likely to involve stringent oversight, including anti-money laundering (AML), know your customer (KYC) checks, and operational risk controls.
Access to the Federal Reserve’s payment rails has historically been restricted to banks, which has compelled many fintech and cryptocurrency firms to rely on intermediary banking services. Direct access, albeit limited, could streamline settlement processes and diminish certain counterparty risks.
Notably, this shift follows the Fed’s withdrawal of previous guidance regarding bank involvement with cryptocurrencies earlier in the year on April 24, 2025, suggesting a more accommodating stance toward integrating new players into the payments ecosystem.
Who Stands To Gain Or Lose
Crypto firms and stablecoin issuers may find it significantly easier to transfer funds and finalize transactions with this new framework. Conversely, banks that currently facilitate access for non-banking entities might face increased competition as fintech and crypto firms gain more autonomy.
Despite the potential benefits, regulators and bank supervisors will still bear the responsibility of mitigating risks associated with fraud, illicit finance, and operational failures. Market participants will be closely monitoring how the Federal Reserve collaborates with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) regarding issues of charters and deposit insurance.
Featured image from Unsplash, chart from TradingView
