US Fed proposes limited payment accounts for FinTechs

The US Federal Reserve has proposed a narrower form of payment account that could give FinTechs and other non-bank firms direct access to parts of the central bank’s payment infrastructure, while stopping short of the full privileges attached to traditional bank accounts at the Fed.

Under the proposal, eligible firms would be able to move money across Fed payment rails, but they would not receive intraday credit, access to the discount window, or interest on reserve balances. The Fed said the accounts are designed to pose limited risk and would be reviewed through a streamlined process, but the proposal would not change the legal rules governing who may hold accounts.

The move comes after years of lobbying from FinTech and crypto firms that want direct access to Fed payment systems in order to speed settlement and lower transaction costs. Reuters reported that the proposal follows a broader policy shift that gathered pace in December, when the Fed first floated the idea of limited payment accounts, and in March, when Kraken became the first crypto company to obtain a restricted Fed master account. Reuters also noted that other firms, including Ripple, Anchorage Digital and Wise, are still seeking similar access.

For FinTech infrastructure providers, the proposal matters because it could reduce dependence on correspondent banking and widen the range of firms able to connect more directly to the core payment system. That said, the accounts would be deliberately constrained. The Fed would still rely on regional Reserve Banks to make the final decision on individual applications, and it has asked those banks to pause pending decisions from non-traditional firms while the policy is under review.

Banks have long argued that broader access for lightly regulated FinTech and crypto firms could create operational and liquidity risks, particularly if firms lack the same ongoing oversight as insured depository institutions. Reuters reported that Fed Governor Michael Barr dissented from the proposal, saying it did not contain enough safeguards against illicit finance. President Donald Trump’s recent executive order urging the Fed to review payment-account policy adds further political momentum, but the central bank’s proposal suggests any opening will remain carefully limited rather than transformational.