Fed Proposes Limited ’Payment Accounts’ to Let Non‑Bank Crypto Firms Access Fed Rails

The Federal Reserve has opened a 45‑day public comment period on a proposal to create limited “payment accounts” that would let eligible non‑bank payment firms and crypto companies clear and settle payments directly on Fed rails without full master account privileges. These accounts would be separate from standard master accounts, carry balance caps (the Fed is considering an overnight cap equal to the lesser of $500 million or 10% of an institution’s assets), earn no interest, have no access to Fed credit facilities, and prohibit correspondent services or settling on behalf of others. The design aims to modernize payment infrastructure, reduce supervisory and systemic risk, and accommodate fintech and crypto business models. Governor Christopher Waller endorsed the move as supporting payment innovation and Fed work with blockchain tools. Governor Michael Barr warned such access could raise money‑laundering and terrorist‑financing risks unless safeguards and supervision are clear. The proposal follows the Fed’s withdrawal of a 2023 statement that had restricted banks’ crypto activities and amid legal challenges from firms denied master accounts. Traders should monitor eligibility rules, balance limits, and operational timelines (Waller suggested a Q4 2026 target) because direct Fed access for stablecoin issuers and crypto payment processors could lower settlement friction, speed fiat on/off ramps, and change on‑chain/off‑chain settlement dynamics—factors that may affect liquidity and short‑term flows in stablecoins and related payment tokens.