Fed proposes payment account for eligible crypto firms

The Federal Reserve Board on May 20, 2026 proposed a new “payment account” that would allow legally eligible nonbank financial institutions, including crypto firms, to access the Fed’s payment and settlement systems. The Board opened a 60-day public comment period on the plan.

The payment account would be a limited version of the master account used by banks. It would not provide intraday credit, access to the discount window, or interest on balances held at a Reserve Bank. Automated controls would block transactions that could create an overdraft, and account holders would be required to maintain controls to guard against illicit finance.

An applicant may hold either a payment account or a master account, but not both. The proposal does not change the statute that defines who may hold a Fed account; it creates a new product available only to entities that already meet existing legal criteria. Compared with a December 2025 prototype, the Board adjusted closing balance limits by tying caps to an institution’s expected payment activity and raised the maximum allowed closing balance.

The proposal follows an executive order signed May 19, 2026 directing federal regulators to review rules that limit fintech and digital asset firms’ use of federal payment rails and to set transparent application procedures. The order asked the Fed to resolve completed applications within 90 days.

The Board asked Reserve Banks to pause decisions on Tier 3 access requests under its Account Access Guidelines while the policy is finalized. Tier 3 covers institutions with novel charters or limited federal supervision, a category that includes many crypto-focused entrants. The length of the pause will affect how quickly pending applicants receive a decision.

A small number of digital asset firms have sought direct Fed access. Kraken Financial obtained a Federal Reserve master account in March after receiving a Wyoming special purpose depository institution charter. Ripple, Anchorage Digital and money-transfer firm Wise have filed for similar access. Custodia Bank, which lost a court challenge to the Fed earlier this year, could use the payment account as an alternate route to settlement services.

Industry responses are split. The Independent Community Bankers of America warned that broader Fed access for digital asset firms could increase financial risk. Cryptocurrency industry groups described the proposal as a response to past account closures. The 60-day comment period will inform final eligibility and operational controls, and whether the Tier 3 pause is lifted before the policy is finalized will affect the timing of decisions on pending applicants.