The Federal Reserve Board has proposed a new type of account at the central bank: a 'payment account,' or what some are calling a 'skinny master account.' This stripped-down version provides access to specific Fed payment services like Fedwire Funds and FedNow, but nothing more. No FedACH, no check operations, and no access to Fed credit facilities. Balances earn no interest, and all payments must be pre-funded, with a hard cap on overnight balances at $500 million or 10% of total assets, whichever applies.
The proposal is designed for financial institutions already legally eligible for a traditional master account but seeking a more limited relationship. This does not expand eligibility to crypto firms, fintech startups, or novel charter banks that have struggled with regulatory limbo. The application process is expected to take 90 days, a marked improvement over the years some traditional applications have faced.
While the proposal does not explicitly mention cryptocurrency, it has significant implications for the digital asset sector. Eligible institutions serving crypto clients could use Fedwire or FedNow for real-time dollar settlement. The pre-funding requirement and balance caps create a risk-controlled environment that regulators may find more palatable for unconventional institutions. Faster settlement through FedNow could improve liquidity management and reduce operational risks.
The public comment period closes February 6, 2026. The proposal signals the Fed's willingness to create tiered access to its systems, potentially paving the way for a more structured integration of new financial entrants.