Federal Reserve Proposes Limited Accounts for Crypto Firms

The Fed proposes new limited accounts for crypto firms.

The United States Federal Reserve (Fed) has put forward a proposal for public discussion regarding the introduction of a new type of account—payment accounts.

This initiative aims to provide access to the central bank’s infrastructure for crypto firms and the fintech sector, albeit with significant restrictions.

The Fed stated that the new format is intended to support payment innovations without granting non-bank participants the full range of banking privileges. Unlike a full-fledged master account, holders of a payment account will:

• not have access to intraday credit;
• not be able to use the discount window;
• not earn interest on balances;
• only operate through services with automatic overdraft controls.

Essentially, the regulator is offering a “light” version of access, focused solely on clearing and settlements.

The proposal builds on a prototype presented in December 2025. At that time, the Fed described payment accounts as a special account for settlements and limited end-of-day balances.

Following consultations, the Fed revised the limit parameters: the maximum end-of-day balance is now raised to $1 billion (up from the previously discussed $500 million). The final amount of funds will be determined by the regional reserve bank based on the participant’s payment activity.

The initiative provides access to:

• Fedwire Funds Service;
• National Settlement Service;
• FedNow Service;
• Fedwire Securities Service—only for free transfers.

However, operations with the Automated Clearing House (FedACH) and Transfer Against Payment securities transactions will remain unavailable due to the lack of mechanisms for instant overdraft control.

The Fed also anticipates that applications for payment accounts will be processed more quickly than traditional accounts, with a target timeframe of about 90 calendar days after receiving a complete set of documents.

Freeze on Applications from the Crypto Industry

Simultaneously, the regulator recommended that reserve banks temporarily refrain from making decisions on already submitted applications from Tier 3 organizations.

This pause will last until the policy on payment accounts is finalized, but no later than December 31, 2026.

Amidst a fragmenting traditional financial system, the Fed is attempting to institutionalize the divide between banks and the crypto sector. The creation of a separate class of accounts could serve as a control tool, where full accounts remain the prerogative of established players, while innovators receive only limited functionality, which may become obsolete by the time of implementation.

Political Context and Disagreements

According to the Fed, the December discussion on payment accounts received 72 letters. Companies from the crypto and payment sectors mostly supported the idea and requested expanded access or eased restrictions.

Traditional banks and associations, on the other hand, advocated for additional barriers and enhanced control.

The decision to publish the proposal was not unanimous. Supporting it were: former Fed Chair Jerome Powell, Philip Jefferson, Michelle Bowman, Lisa Cook, Steven Miran, Christopher Waller.

Federal Reserve Governor Michael Barr voted against it. Reuters reports that he considered the initiative insufficiently protected against the risks of illegal financing.

The Fed’s new step came a day after an order by Donald Trump. The U.S. President instructed regulators and the Fed to review rules that may restrict financial innovations and fintech companies’ access to the central bank’s payment infrastructure.

The crypto industry’s interest in Fed accounts has been longstanding. Reuters noted that in March, Kraken became the first crypto company to receive a limited account at the Fed. Ripple, Anchorage Digital, and Wise are also seeking similar access.

However, the Fed itself emphasizes that the proposal does not change the legal admission criteria. The final decision will still rest with the regional reserve banks. Even after the launch of the payment account, crypto companies are not guaranteed automatic access to the Fed’s infrastructure.

Earlier, on May 14, the U.S. Senate Banking Committee approved the CLARITY Act with a vote of 15 to 9. The document provides for comprehensive regulation of the crypto market at the federal level.

On May 15, Bitcoin advocate Kevin Warsh took over the Fed, succeeding Jerome Powell. He will serve a four-year term.