TLDR
- The Fed proposed new payment accounts for eligible financial institutions.
- Payment accounts would support clearing and settlement through Fed services.
- Account holders would not get intraday credit or discount window access.
- The Fed encouraged a pause on Tier 3 access requests during review.
- Public comments are due 60 days after Federal Register publication.
The Federal Reserve Board has requested public comment on a proposal to create a new “payment account” for legally eligible financial institutions seeking direct access to clearing and settlement services.
The proposal is aimed at institutions with newer business models, including some fintech and crypto-related firms, that want access to Federal Reserve payment services without receiving the full range of benefits available to traditional banks.
The payment account, sometimes referred to as a “skinny master account,” would allow eligible institutions to clear and settle payments through the Federal Reserve system. The account would not provide access to intraday credit, the discount window or interest on balances held at a Reserve Bank.
Fed Proposes Limited Payment Account Structure
The Federal Reserve said the payments landscape is changing as more financial firms seek faster and cheaper ways to move money. Some of these firms are not federally insured, which has raised questions about access, risk controls and consistency across the Federal Reserve system.
Under the proposal, payment account holders would only have access to payment services with automated controls designed to prevent overdrafts. The accounts would be limited to clearing and settlement activity and would not expand the legal eligibility rules for Federal Reserve accounts or services.
The Board said requests for access to Federal Reserve accounts and payment services would still be decided by individual Reserve Banks, as required by law. The proposal is intended to create a more defined structure for eligible institutions while limiting risks to Reserve Banks and the payment system.
Crypto and Fintech Firms Watch Tier 3 Access
The proposal is relevant for fintech and crypto firms that have sought closer access to U.S. payment rails. Many crypto-related applicants are generally viewed as falling under Tier 3 of the Fed’s Account Access Guidelines, a category that includes institutions with higher supervisory or risk review needs.
The Federal Reserve is encouraging Reserve Banks to temporarily pause decisions on access requests from Tier 3 institutions while the Board completes its policy development process. According to the update, the pause is intended to support more consistent treatment of applicants across the Federal Reserve system.
Eleanor Terrett said the Fed’s request marks the next formal step in Governor Christopher Waller’s payment account implementation process. She said the proposal follows an earlier public comment period that ended in February.
The payment account framework could affect firms seeking direct settlement access instead of relying fully on intermediary banks. Direct access may reduce settlement delays and lower payment costs, but the Fed has said any account holder must manage risks tied to illicit finance, liquidity and operational controls.
Public Comment Period Runs for 60 Days
The new proposal is similar to the prototype described in the Board’s December 2025 request for information. The Fed said it made limited changes after reviewing earlier feedback, including adjustments to closing balance limits.
Closing balance limits would be based on an institution’s expected payment activity. The proposal also increases the maximum closing balance compared with the earlier version.
The Federal Reserve said payment account holders would not be able to earn interest on balances held at a Reserve Bank. They also would not be able to borrow through the discount window, which is normally available to eligible depository institutions under specific conditions.
The comment period will close 60 days after the proposal is published in the Federal Register. Public comments may shape the final framework and the way Reserve Banks evaluate applications from eligible firms.
The proposal comes as U.S. regulators continue to review how digital asset companies, fintech platforms and non-bank financial institutions should interact with traditional payment systems. It also follows growing attention on master account access for firms involved in stablecoins, crypto custody and digital payments.
