Core Insights - The Federal Reserve is considering a new "payments account" for nonbank payment providers, challenging the traditional banking system's control over money movement in the U.S. [1][2] - The proposal aims to provide nonbank institutions with direct access to the Federal Reserve's payment rails, creating a new regulatory framework for payments in the U.S. [4][5] Group 1: Regulatory Landscape - The U.S. lacks a comprehensive federal payments charter for nonbank payment providers, unlike the UK and EU, forcing them to navigate state laws or rely on bank partnerships [3] - The absence of a federal framework has allowed stablecoin issuers to emerge as key players in the digital payment landscape, despite their limited access to Fed payment systems [3] Group 2: Proposal Details - Governor Waller's "skinny master account" would allow eligible nonbank institutions to access Fed payment rails without the full privileges of banks, such as earning interest or accessing discount windows [4] - This account would focus solely on facilitating payments, marking a significant shift in how payments can be processed in the U.S. [5] Group 3: Historical Context - Waller's proposal revives the concept of narrow banking, which separates payment functions from credit creation, a concept that has been discussed since the 1930s but has not been implemented in the U.S. until now [6]