The U.S. Federal Reserve 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 grant access to its payment pathways without businesses having to jump through the considerable hoops that more comprehensive services would provide.
The Federal Reserve said in a statement Friday that it was requesting information on how to satisfy incoming requests from businesses that rely on new technology to more easily access 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.
Federal Reserve master accounts are direct conduits for financial companies to access the central bank’s payment channels. They can be difficult to obtain, and that has been a struggle for some crypto companies.
“These new payment accounts would support innovation while keeping the payments system secure,” Gov. Christopher Waller said in a statement. “This request for information is a key first step in ensuring that the Federal Reserve responds to developments in the way payments are made.”
Waller had spoken out in favor of the idea before, having introduced it as a “thin” master bill in October. In Friday’s descriptions, the accounts would pay no interest, provide access to Federal Reserve credit and have balance limits.
Gov. Michael Barr, the Democratic appointee who was the Federal Reserve’s regulatory chief until the arrival of President Donald Trump’s administration, said he opposed the request, arguing that it “is not specific enough about safeguards to protect against accounts being used for money laundering and terrorist financing by institutions we do not oversee.”
