Fed To Join Payments Revolution, Bring Crypto In From the Fringes

The US Federal Reserve is preparing to join the “revolution in payments” and bring crypto “from the fringes” of finance into the mainstream.

That’s according to Governor Christopher Waller, who said at the Fed’s Payments Innovation Conference in Washington on Oct. 21 that the central bank will grant stablecoin issuers and fintech firms access to its payment system through proposed “skinny” master accounts.

The move underscores a dramatic shift in the Fed’s approach to digital assets and decentralized finance. Waller said technologies like stablecoins, tokenized assets, and AI are “no longer on the fringes but increasingly woven into the fabric of the payment and financial systems.”

“Payments innovation moves fast, and the Federal Reserve needs to keep up,” he said. “We intend to be an active part of that revolution.”

Fed Intends To Be Part Of The “Technology-Driven” Revolution In Payments 

Addressing a room full of industry leaders, including Chainlink CEO Sergey Nazarov, Coinbase CFO Alesia Haas, Circle President Heath Tarbert, and several Fed officials, Waller said the decentralized finance (DeFi) community is no longer “viewed with suspicion and scorn.” 

Incredible leadership today from Governor Chris Waller on the idea of a “skinny” Fed Account specifically for payments use cases for eligible institutions.

This will enable a whole host of opportunities to further the US as the leader in payments and stablecoins. pic.twitter.com/QTIfYnRsfx

— Nathan McCauley ⚓ (@nathanmccauley) October 21, 2025

“Rather, today, you are welcomed to the conversation on the future of payments in the United States and on our home field—something that would have been unimaginable a few years ago,” he said. “As you all know, we are well into a technology-driven revolution in payments.” 

Fed To Offer Streamlined Accounts For Stablecoin And Fintech Providers

Governor Waller said that he has instructed Fed staff to explore what he calls a “payment account,” that will be aimed at providing more support “to those actively transforming the payment system.” 

Those accounts would be a lighter version of a masters account, and will be targeted at firms that don’t necessarily need all of the “bells and whistles of a master account, or access to the full suite of Federal Reserve financial services.” 

He said that the so-called ”skinny” payment accounts would be available to “legally eligible entities” that will need to follow the central bank’s Guidelines for Evaluating Accounts and Services Requests. 

Institutions receiving these accounts would face specific operational restrictions that are designed to limit Fed balance sheet exposure.

In addition to that, the accounts would not earn interest on deposited balances. They might also carry mandatory balance caps to control their size. 

He then went on to say that the “skinny” master accounts would exclude discount window borrowing and certain Fed payments services where the central bank cannot adequately control overdraft risks. 

“The idea is to tailor the services of these new accounts to the needs of these firms and the risks they present to the Federal Reserve Banks and the payment system,” Waller explained during his speech,” he said during his speech.

“Accordingly, and importantly, these lower-risk payment accounts would have a streamlined timeline for review,” he added. 

The Fed’s opening up to the stablecoin sector follows months after US President Donald Trump signed the GENIUS Act into law in July. 

This is the first regulatory framework on the federal level that establishes the requirements for stablecoin firms looking to issue their tokens in the US. The stablecoin market cap has since broken above $300 billion for the first time.

Stablecoin market cap (Source: DefiLlama)

New “Skinny” Master Accounts Could Benefit Ripple, Kraken, Circle, And Custodia Bank

The new “Skinny” master accounts could accelerate the approval process for crypto-native firms such as Ripple, Kraken and Custodia Bank, who are all pursuing Fed master accounts through lengthy legal processes. 

One reason the process has been so lengthy is because traditional finance banks have also pushed back against the applications. 

Ripple’s CEO, while speaking at DC Fintech Week earlier this month, commented on the pushback and called the banks “hypocritical” for saying that the crypto sector should be held to the same standard while not being given access to infrastructure like Fed master accounts.

It could also benefit other firms that operate in the digital asset space who are trying to gain access to the Fed’s payments infrastructure.

One of them is USD Coin (USDC) issuer Circle, who has applied for a national banking/trust charter. This is often seen as a prerequisite for full Fed account access. 

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