Fed Proposes Letting Stablecoin Issuers Access Banking System Directly Without Banks

Core Insights - The Federal Reserve has proposed granting stablecoin issuers and fintech companies direct access to its payment infrastructure, marking a significant policy shift from its previous cautious approach towards crypto companies [1][2] - The new "payment accounts" or "skinny master accounts" will allow eligible institutions to connect directly to Federal Reserve payment rails while implementing specific risk controls [2][3] Group 1: Policy Changes - The proposal represents a major reversal in the Fed's stance, allowing companies like Custodia Bank and Kraken, which have faced lengthy legal battles for banking access, to benefit from a streamlined approval process [2] - The payment accounts will provide basic Federal Reserve payment services to institutions that currently rely on third-party banks for payment services [3] Group 2: Account Features - The proposed accounts will not earn interest on deposits and may have mandatory balance caps to control their size [4] - Participants will lose access to daylight overdraft privileges, meaning transactions will be rejected once account balances reach zero [4] - The accounts will exclude discount window borrowing and certain Fed payment services to manage overdraft risks effectively [4] Group 3: Future Implications - The new accounts are designed to meet the needs of fintech firms while addressing the risks they pose to the Federal Reserve and the payment system [5] - All legally eligible entities can qualify for a payment account under existing legal frameworks, with no changes to eligibility requirements [5] - Companies like Ripple and Anchorage Digital, which filed master account applications in 2025, could see faster decisions under the proposed framework [6]