Fed Proposes Limited Payment Accounts for Fintech and Crypto-Linked Banks

The US Federal Reserve has initiated a process to establish limited payment accounts for fintech and crypto-linked banks.

The proposal, which was released on Wednesday through a request for comment and notice of proposed rulemaking, aims to provide these entities with narrower access to the Fed's payment rails without the same level of backstops as traditional banks.

The 'skinny master accounts' would allow eligible nonbank financial institutions to participate in the Fed's payment system while minimizing potential risks.