The U.S. Federal Reserve on May 20 unveiled a formal proposal for limited-purpose payment accounts, a streamlined alternative to full master accounts that the cryptocurrency industry has long sought. The central bank opened a 60-day public comment period on the plan, which builds on a December request for information and could give non-bank financial firms—including crypto companies—direct access to the Fed’s payment rails for the first time.
Often called “skinny” accounts, the new structure would allow eligible institutions to clear and settle payments faster and at lower cost, but without the privileges of a traditional master account. Holders would not receive intraday credit or discount window access, would earn no interest on balances, and would only be able to use payment services with automated controls that prevent overdrafts. The Fed also revised key parameters: closing balance limits would be tied to an institution’s expected payment activity, and the maximum closing balance has been increased compared with the initial prototype.
The proposal follows a March milestone when Kraken became the first crypto-focused bank to obtain a limited master account from the Federal Reserve Bank of Kansas City—an action taken outside a federal rule. The Fed has since asked regional banks to pause similar applications while it finalizes the new framework.
Adding urgency, President Donald Trump issued an executive order just a day earlier directing the Fed to review how it grants uninsured depository institutions and non-bank financial firms access to payment accounts and services, and to examine the independence of regional Fed banks in setting up such accounts. The combination of regulatory momentum and White House pressure elevates the significance of the proposal for the crypto sector, which sees direct Fed access as a means to reduce reliance on intermediary banks and slash settlement times.
The comment period will shape eligibility criteria and operational details before any final rule. Industry observers expect vigorous feedback from both traditional banks and digital-asset firms.
