The U.S. central bank took a first step toward establishing a more limited version of its so-called master accounts, welcoming input on how the central bank could formulate “payment accounts” that would provide access to its payment rails without companies having to jump through the significant hoops that would provide more comprehensive services.
The Fed said in a statement Friday that it requested information on how to accommodate the incoming requests from firms that rely on new technology to more easily utilize services “for the express purpose of clearing and settling the institution’s payment activity,” according to a board memo on the concept. The public comment window will be open for 45 days.
Fed master accounts are direct conduits for financial firms to the central bank’s payment rails. They can be hard to come by and have been a struggle for some crypto companies.
“These new payment accounts will support innovation while keeping the payment system secure,” Governor Christopher Waller said in a statement. “This request for information is an important first step in ensuring that the Fed is responsive to developments in how payments are made.”
Waller had championed the idea before, after releasing it as a “skinny” lead account in October. In Friday’s descriptions, the accounts would pay no interest, provide access to credit from the Fed and would have balance caps.
Gov. Michael Barr, the Democratic appointee who was the Fed’s regulatory chief until the arrival of President Donald Trump’s administration, said he opposed the request on the grounds that it “is not sufficiently specific about safeguards to protect against accounts being used for money laundering and terrorist financing by institutions we do not oversee.”
