Key Takeaways
- The Federal Reserve has proposed a new category of limited-access master accounts for eligible financial institutions.
- Crypto-related firms such as Ripple and Anchorage could gain direct access to Fed payment infrastructure under this proposal.
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Federal Reserve Governor Chris Waller said at the Payments Innovation Conference today that the central bank is exploring a new limited-access master account framework, which would enable eligible financial institutions to access the Fed’s payments rails without going through intermediary banking partners.
The proposal was first reported by Crypto in America host Eleanor Terrett. The new “master account lite” framework could benefit firms such as Custodia Bank and Kraken, which have sought Federal Reserve master accounts for years.
Custodia Bank’s Federal Reserve master account application was previously rejected, prompting the bank to initiate legal proceedings over access issues.
The framework may also accelerate pending applications from companies, including Ripple and Anchorage, which submitted their requests earlier this year.
A Fed master account is a bank’s main account with the Federal Reserve. It lets institutions send and receive payments, settle transactions, and hold funds directly with the Fed, something usually limited to regulated banks and similar institutions.
