Lummis: Fed ‘lite’ master accounts could end crypto de‑banking and boost payments
Sen. Cynthia Lummis applauded Federal Reserve Governor Christopher Waller’s proposal to allow fintechs and payment‑focused crypto firms to hold restricted or “lite” master accounts at the Fed. The accounts would mirror bank master accounts but with limits tailored for non‑bank payment providers, giving eligible crypto companies direct Fed access for settlement and payments. Lummis says the framework would halt the de‑banking trend critics call “Operation Chokepoint 2.0,” and enable faster, cheaper and more secure payments while supporting responsible payments infrastructure. The reporting notes persistent debanking examples (e.g., Strike, BlindPay, Kontigo) despite an executive order against unjustified account closures, underscoring industry frustration. Traders should watch this proposed regulatory shift — if adopted, it could materially lower operational and custody risks for payment‑oriented crypto firms, improve liquidity flows in on‑ and off‑ramps, and influence transaction costs and settlement speed for crypto payments. This is not investment advice.
Bullish
Allowing payment‑focused crypto firms and fintechs to hold restricted Fed master accounts reduces counterparty, settlement and operational risks that arise from loss of bank access. For traders, the proposal is bullish because it: 1) improves on‑ and off‑ramp reliability (reducing liquidity squeezes around fiat rails); 2) can lower transaction and settlement costs for payment flows tied to crypto, supporting higher throughput; and 3) signals regulatory accommodation that can lift market confidence in payment‑oriented crypto projects. Short term, markets may react positively on news and sentiment, especially for projects tied to payments and fiat rails. Longer term, adoption would likely strengthen institutional and retail usage, improving fundamentals for payment‑layer tokens and services. Risks remain — the proposal is not finalized, implementation details and eligibility will matter, and political or regulatory backlash could temper benefits — but overall the concrete step toward Fed access is a net positive for market stability and liquidity in payment‑centric crypto sectors.