Fed Proposes 'Skinny' Master Accounts for Fintechs and Crypto Firms

The Federal Reserve has taken a significant step towards embracing financial innovation by proposing the creation of 'skinny' master accounts for fintechs and crypto firms.

The new accounts would grant access to the Fed's payment systems, including FedNow and Fedwire, allowing for faster clearing and settlement of payments. However, in an effort to mitigate risks, the proposed accounts will not include credit or interest features.

As part of the proposal, strict anti-money laundering rules will be enforced, and institutions seeking these accounts must comply with them. The regulator has opened a 60-day feedback window for public input on the proposal, which was issued in response to President Trump's recent executive order instructing the Fed to review its policies and integrate fintechs and crypto firms into the payment ecosystem.