Fed Proposes 'Skinny' Payment Accounts for Non-Bank Firms

The Federal Reserve is taking steps towards creating 'skinny' payment accounts, which would allow non-bank firms, including crypto companies, to access the Fed's payment infrastructure. This move has sparked a regulatory clash between banks, digital asset companies, and regulators over who should be allowed direct access to the Fed's systems.

The proposal aims to grant limited access to the Fed's payment rails, but with certain restrictions in place to manage risk. For instance, eligible non-bank firms would only have direct settlement access, without core banking privileges such as interest on reserve balances or access to intraday credit facilities.

Crypto companies and fintech firms have long argued that relying on intermediary sponsor banks creates unnecessary friction and operational dependencies. Direct access to the Fed's payment systems could significantly improve stablecoin settlement efficiency, fiat on/off ramps, real-time payments, treasury management, and cross-platform liquidity movement.