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Fed’s “Skinny” Accounts
The Federal Reserve took a step toward finalizing its “skinny” master account framework on Wednesday, publishing a proposal for public comment and suggesting for the reserve banks to temporarily pause decisions on access requests from institutions classified as Tier 3.
“publishing a proposal for public comment”
Federal Reserve Gov. Michael Barr dissented, writing that "It does not provide sufficiently specific and robust safeguards to protect against the accounts being used for money laundering and terrorist financing by institutions we do not supervise,".
The proposal would give firms approved for the limited master account access only to the Fedwire Funds Service, the National Settlement Service, FedNow and Fedwire Securities for free transfers, while excluding access to the Fed's automated clearing house network, or ACH.
The Fed also directed reserve banks to temporarily pause decisions on access requests from Tier 3 institutions until the Board has completed its policy development process on the payment account proposal, to promote consistent implementation.
The Fed’s proposal is expected to issue official guidance on its limited master account by the end of the year, and it was approved in a 6 to 1 vote.
Trump Order Pushes Review
President Donald Trump issued an executive order titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” signed on May 19, 2026, directing federal banking regulators, including the Federal Reserve, to reconsider barriers that have limited fintech and crypto firms’ access to the nation’s payment infrastructure.
The order asks regulators to conduct a “comprehensive evaluation” of the legal and policy framework governing access to Reserve Bank payment accounts and services by uninsured depository institutions and non-bank financial companies, including firms engaged in digital asset activities.
The executive order also signals a different policy direction for crypto firms that have sought direct access to payment rails like Fedwire, historically limited to insured depository institutions.
The White House paired the directive with a separate order titled “Restoring Integrity to America’s Financial System,” focusing on strengthening anti-money laundering and illicit finance controls.
The order requires each federal financial regulator to, within 90 days, “identify regulations, guidance documents, orders, no-action letters, and other items that unduly impede fintech firms from entering into partnerships with federally regulated institutions.”
What Changes Next
The Federal Reserve’s proposal would create a new category of payment account that would allow legally eligible financial institutions to clear and settle transactions, while stating the account would be “tailored to support innovation” while also “mitigating material risks to the Reserve Banks and payment system.”
“opening a comment period on the latest description”
The plan would restrict account holders from intraday credit and the discount window, would not allow them to earn interest on balances held at a Reserve Bank, and would limit access to payment services with automated controls to prevent overdrafts.
The Fed said it is now asked the regional banks to pause their consideration of certain applications while it finishes the rule, and the Board is also encouraging Reserve Banks to pause decisions on account-access requests from Tier 3 institutions.
In March, Kraken became the first crypto bank to get a limited master account, with access granted by the Federal Reserve Bank of Kansas City rather than under a federal rule from the Fed board in Washington.
The executive order’s review timeline and the Fed’s comment period together set a near-term process window, with the payment account proposal opened for a 60-day comment period and the order requiring a 120-day report from the Fed assessing its legal authority to broaden access.
