The Federal Reserve has opened the door to a new type of central bank account that could reshape how crypto and payment-focused firms access the US banking system, under a tailored approval framework.
On Friday, the Fed requested public input on a proposed “payment account.”
The account would sit alongside, but remain distinct from, the traditional master account that banks currently use to access Federal Reserve services.
The comment period will remain open for 45 days following publication in the Federal Register.
Fed Weighs Limited-Use Accounts to Ease Strain on Payment Rails
The proposal reflects how changes in the payments industry have begun to strain the Federal Reserve’s long-standing account framework.
New business models, including payment-focused fintech firms and crypto companies, have sought direct access to the Fed’s payment rails without engaging in lending, deposit-taking, or other activities associated with full-service banks.
The Fed said the payment account is designed to meet those limited needs while reducing risks to the broader financial system.
Under the proposal, payment accounts would not earn interest, would not provide access to Federal Reserve credit facilities, and would be subject to balance caps.
The Fed is considering limits such as an overnight cap equal to the lesser of $500 million or 10% of an institution’s assets.
Account holders would also be prohibited from offering correspondent services or settling transactions on behalf of other institutions.
Use of the account would be restricted to clearing and settling the institution’s own payments, a design intended to lower supervisory and systemic risk and allow for a more streamlined review process than is required for full master accounts.
Federal Reserve Governor Christopher Waller said the proposed account structure could encourage innovation while maintaining the safety and efficiency of the payments system.
He described the request for information as an initial step toward modernizing central bank infrastructure, noting the Fed’s ongoing work with blockchain-based tools.
Waller first urged the Fed to explore payment accounts for clearing and settlement in October.
Fed proposes “payment accounts” granting stablecoin issuers direct Fed access without banks as Ripple and Anchorage Digital applications could see faster decisions.#Fed #Stablecoinhttps://t.co/RhCdQ7ZVaV
— Cryptonews.com (@cryptonews) October 21, 2025
The Fed emphasized that the new model would not alter the legal eligibility requirements for access to Federal Reserve services.
Instead, it would create a narrower access point within the Fed’s existing single master account framework, which typically allows one master account per chartered institution, supplemented by informational subaccounts that do not hold separate balances.
After Years of Resistance, U.S. Bank Regulators Ease Crypto Restrictions
Not all Fed officials support the payment account proposal. Governor Michael Barr warned that expanding access without clearly defined safeguards could increase risks related to money laundering and terrorist financing, particularly for institutions the Fed does not directly supervise.
The move follows years of controversy surrounding the Federal Reserve’s handling of crypto-related applications.
In 2023, the Fed adopted a policy that created a strong presumption against many crypto activities and denied Custodia Bank’s application for a master account after a 27-month review.
Custodia, a Wyoming-chartered special purpose depository institution, has argued that the denial violates the Monetary Control Act, which states that payment services “shall be available” to eligible institutions.
The bank escalated its legal fight this month, seeking an en banc review from the Tenth Circuit Court of Appeals after a divided panel upheld the Fed’s decision.
Custodia Bank petitions full appeals court to review Federal Reserve’s master account denial, citing constitutional concerns and federal law violations.#Crypto #Bank #Fedhttps://t.co/KyM8MlA1WC
— Cryptonews.com (@cryptonews) December 16, 2025
Since then, the regulatory posture has begun to shift. On December 8, the Federal Reserve withdrew its 2023 policy statement that effectively barred banks from most crypto activities.
Beyond the courtroom, federal regulators have begun dismantling other barriers facing crypto firms, including addressing inappropriate restrictions on lawful businesses and approving several crypto firms to pursue national trust bank charters.
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