- Key takeaway: The Federal Reserve is moving quickly to establish a narrower payments account for certain eligible institutions for which a full-suite master account typically offered to traditional banks may not be suitable.
- Expert quote: "The goal here, assuming nothing goes haywire, is to have these up and operationalized by the fourth quarter of 2026. So we're moving at startup speed on this — we're not screwing around like federal regulators." — Federal Reserve Gov. Christopher Waller
- What's at stake: State-chartered, crypto-centered depository institutions have been pushing the Fed to grant them master accounts, with one suing the central bank to compel them to grant a master account.
PHILADELPHIA — Federal Reserve Gov. Christopher Waller said Wednesday that the central bank is moving quickly to develop a "skinny" payments account for eligible institutions, saying he is aiming for a final rule to be issued on the new accounts by the end of next year.
Speaking at the Federal Reserve Bank of Philadelphia's Fintech Conference Wednesday morning, Waller — who chairs the Fed's Committee on Payments, Clearing and Settlement — said the accounts he envisions would not expand eligibility beyond those institutions that were already eligible for accounts. But he said that the wide array of depository institutions and business models behind them suggests that the Fed should be more flexible in how it grants access to its payments rails if that access does not threaten financial stability and can make good financial institutions better.
"So the question is, in a world where tailoring is now the buzzword in Washington, D.C., why don't we do a similar approach with the master accounts and just tailor the types of access that banks have to the Fed's payment rails depending on the risk nature of the institution?" Waller said. "This will generate competition in the payment space, hopefully drive down costs. That's the goal, we'll see what actually happens."
Waller went on to say that the central bank is moving quickly to develop a rule that would govern these new payments accounts, with a request for information coming in the near future and a proposal soon after that comment period has closed. Waller said agency staff is already at work operationalizing the idea, and hopes to have a rule finalized by the fourth quarter of 2026.
"So the timeline for what we have in mind is, we'll put out a request for information, for comment, from the industry and everybody around … very quickly, maybe a 45-day comment period. We'll take those comments back, think about how we structure the account, then we'll do whatever formal rulemaking … we have to. Meanwhile, we're in the background already doing all the tech development. The goal here, assuming nothing goes haywire, is to have these up and operationalized by the fourth quarter of 2026. So we're moving at startup speed on this — we're not screwing around like federal regulators."
Waller emphasized that the proposal would not expand eligibility for the skinny accounts beyond institutions that are already eligible under the Fed's
The purpose of the skinny payments account, Waller said, would be to create an offering for master account applicants that may not need or want a full-service master account — or who would be unlikely to obtain one.
"There seems to be some confusion as to a change in eligibility, and that did not happen," Waller said. "It's just: Here's the product, depending on if you're an eligible depository institution, you can apply for this type of account, or we will give you that type of account, depending on your risk profile."
