Fed Governor Pushes for Major Reforms to Improve Crypto Access

The U.S. Federal Reserve seeks major changes to crypto access. At the Federation’s first payments innovation summit, Governor Walker Christopher said the central bank must adapt to significant changes.

Christopher outlined that new, selective versions of the Fed’s master account will guide and shape the participation of fintech and crypto organizations. These changes are intended to help digital assets operate efficiently within regulated boundaries, though access to core payment infrastructure would remain limited.

Limited accounts would directly address the sector’s long-standing dependence on domestic banks. Christopher says he has directed Fed staff to investigate his Payment Account proposal, aiming to ensure secure and efficient crypto transactions within the central bank’s system.

The Federal Reserve Bank Grants Access To A Master Account To Eligible Entities

Currently, the Federal Reserve Bank grants access to master account services only to eligible entities that comply with its rules for account assessment.

The proposed accounts would depart from traditional master accounts by not permitting interest, grants, or borrowing via the Fed’s discount windows. Instead, they would place strict caps and other limitations to safeguard the Fed’s system while enabling cautious participation by crypto and fintech firms.

Master accounts have historically been tightly restricted. These let institutions settle directly with the Federation’s central bank. Only federally chartered banks are approved, given the intense scrutiny on non-banks.

Fed’s New System Places Crypto Platforms Under Strictest Review

In the Fed’s new three-tier system, the highest risks are crypto platforms and Stablecoin issuers, which lack federal oversight. As non-banks, they face the strictest reviews.

Waller argued that his payment account plan directly addresses the obstacles non-banks face, aiming to offer Stablecoin issuers and crypto companies controlled but meaningful access to the central bank’s infrastructure.

This plan marks a significant shift for the U.S. Notably, similar initiatives exist in other regions, where nonbanks enjoy some access to central payments. Highlighting this contrast, the governor illustrated why the Fed needs innovation to stay competitive.

The comments of Waller drew attention from fintech and crypto leaders. Among them was the Chief Executive Officer of Ripple, Brad Garlinghouse, who, prior to this, had often criticized Wall Street’s resistance.

He did not support Waller’s idea of granting such access, even though Ripple is among the entities seeking a Fed master account. This would allow full participation and direct access to the U.S. payments ecosystem.

For fintech, crypto companies, and Stablecoin issuers, the payment account initiative is designed to bridge regulatory gaps and enable innovative participation while carefully balancing risk and access to the U.S. financial system.