The US Federal Reserve is seeking public input on its proposed “payment account,” known as a “skinny master account,” which would provide fintechs and crypto firms with access to the central bank without traditional approvals. Fed Governor Christopher Waller believes these new accounts will foster innovation while ensuring the safety of the payments system.

Waller introduced the payment account feature to adapt to the rapid advancements in the payments industry, which have sparked innovative banking approaches and changes to business models. The move is aimed at reducing risks to the payment system and streamlining the review process for payment account requests.

However, not all Fed officials agree with seeking public input, citing concerns about risks related to money laundering and terrorist financing if safeguards are not clearly defined. This could be especially risky for institutions that the Fed does not directly supervise.

Inclusion of payment-focused crypto firms into the Fed’s banking system could strengthen the connection between crypto and traditional banking, potentially benefiting companies like Circle, Coinbase, Kraken, and Block, Inc. This move marks a significant shift in the industry, as crypto companies previously faced challenges accessing banking services.

The proposed payment accounts, unlike master accounts, would not have the same privileges as big banks and Wall Street institutions. They would not earn interest, have access to Fed credit, and would be subject to balance caps and other restrictions.

The comment period for providing feedback on the payment account plan will close 45 days after publication in the Federal Register. Waller expects the payment account feature to be operational in the fourth quarter of 2026, as the Fed continues to experiment with blockchain-based payment technologies to modernize the US payment system.

Read more at Coin Telegraph: Fed Seeks Input on Fed Accounts for Fintechs