Crypto industry and banks clash over Fed access to payment accounts… debate heats up over ‘skinny master accounts’

As the US Federal Reserve (Fed) considers introducing so-called “skinny master accounts” that would grant fintech and virtual-asset (cryptocurrency) firms limited access to the payments system, the crypto industry and the banking sector are sharply divided.

According to Cointelegraph on the 8th (local time), the Fed had received a total of 44 comment letters on the proposed framework as of last week. The proposal’s core is the creation of a new “payment account” that, unlike the master accounts held by large banks, would permit payment functions only—without interest payments or access to Fed lending. The Fed also floated a cap on account balances at the lower of 10% of total assets or $500 million.

The crypto industry has largely welcomed the move. Stablecoin issuer Circle said in its submission that the account would be “the first step” in innovating US payments infrastructure envisioned by the GENIUS Act, arguing it would “materially strengthen” the US payments system. A newly launched blockchain payments consortium also said it could “address risks concentrated in a small number of banks and anti-competitive practices.” Anchorage Digital, the first federally chartered crypto bank in the US, noted, however, that details such as the balance cap, the lack of interest, and limits on access to the Automated Clearing House (ACH) network need refinement.

By contrast, the banking industry and financial reform groups voiced strong concerns about expanding access to the central bank’s payments rails. The American Bankers Association (ABA) said many of the firms in scope lack long supervisory track records and are not subject to consistent federal-level prudential regulation. The Wisconsin Bankers Association likewise argued eligibility should be assessed strictly not only on legal qualifications but also governance, risk management and internal controls. Better Markets, a financial reform lobbying group, criticized the proposal as “an irresponsible giveaway” to the crypto industry.

The Fed plans to review whether to finalize the rule based on the comments received, a process expected to take several months. The debate over balancing payments-infrastructure innovation with financial stability is likely to continue for some time.