Federal Reserve Governor Christopher Waller proposed a brand new fee account on Oct. 21 that might grant stablecoin issuers and crypto companies direct entry to Fed fee rails with out full grasp account privileges.

The announcement on the Fed’s inaugural Funds Innovation Convention marked a reversal from the central financial institution’s guarded stance towards digital asset companies.

Waller described the idea as a “skinny” grasp account offering fundamental Fedwire and ACH connectivity whereas stripping out curiosity funds, overdraft amenities, and emergency lending. The brand new account creates a payments-only door that would reshape how stablecoin issuers settle greenback flows.

The account would carry steadiness caps, pay no curiosity, provide no daylight overdrafts, and exclude low cost window borrowing.

Corporations pursuing full grasp accounts, comparable to Custodia Financial institution, Kraken, Ripple, and Anchorage Digital, may gain advantage from sooner approval timelines.

The convention assembled roughly 100 non-public sector innovators in what Waller framed as a brand new period by which “the DeFi business is just not considered with suspicion or scorn” however is “to the dialog on the way forward for funds.”

Slender banking and stablecoin construction

The fee account revives slender banking, separating funds from credit score creation.

Stablecoin issuers already function as de facto slender banks, holding backed reserves and shifting cash with out lending, however lack direct Fed entry and should accomplice with business banks to redeem tokens.

Waller’s proposal would let qualifying companies maintain reserves immediately with the Fed, again tokens with central financial institution cash, and eradicate friction between banks and companions that creates bottlenecks throughout stress.

Direct Fed entry would place compliant US stablecoins nearer to slender cash, lowering bank-run danger.

If reserves sit on the Fed reasonably than business financial institution deposits, tokens change into claims on central financial institution liabilities, eliminating credit score danger.

Caitlin Lengthy, CEO of Custodia Financial institution, framed the shift as correcting “the horrible mistake the Fed made in blocking payments-only banks from Fed grasp accounts.”

Operational enhancements and trade-offs

Redemption flows can be extra environment friendly if issuers posted and obtained funds immediately reasonably than routing them via accomplice banks.

The development is mechanical, with fewer steps, decrease latency, diminished dependency on financial institution hours, however materials throughout heavy flows when redemption queues lengthen.

Issuers redeeming into accomplice accounts and initiating wires may full each legs with Fed rails, compressing settlement from hours to close real-time and eradicating the chance {that a} accomplice financial institution freezes transfers.

Steadiness caps will decide utility for giant issuers. Tether holds reserves within the tens of billions. Strict caps may accommodate operational liquidity however not the entire base, forcing a cut up of reserves.

The Fed’s targets, that are controlling steadiness sheet impression and limiting credit score publicity, will form caps, and issuers will weigh direct Fed entry for a slice of reserves versus holding every little thing with business banks.

Ripple CEO Brad Garlinghouse argued almost one week earlier than Waller’s speech that crypto companies that meet banking-grade AML and KYC requirements ought to obtain banking-grade entry to infrastructure, as CoinDesk reported.

Ripple filed a grasp account utility in 2025. Direct Fed entry would permit Ripple to settle greenback legs of cross-border transactions with out utilizing correspondent banks.

The logic applies to exchanges and custodians that depend on financial institution companions for fiat rails, direct Fed connectivity removes a dependency and a choke level.

Arthur Hayes, co-founder of BitMEX, supplied a skeptical take:

“Think about if Tether didn’t must depend on a TradFi financial institution for its existence. The Fed is shifting to destroy business banking within the US.”

The priority is disintermediation. If massive issuers and fee processors entry Fed rails immediately, they now not want business banks for fundamental companies, eroding deposit bases whereas concentrating liquidity on the Fed.

The restrictions Waller outlined, comparable to no curiosity, steadiness caps, and no overdrafts, purpose to string the needle to help funds innovation with out making the Fed the first deposit taker or assuming credit score danger on nonbanks.

Right here’s what modifications

Waller directed Fed workers to collect stakeholder suggestions, however didn’t specify a timeline.

The GENIUS Act, signed into regulation in July 2025, established federal stablecoin necessities however didn’t grant direct Fed entry.

Waller’s proposal fills that hole. Corporations with pending functions may see sooner selections. Banks with fee subsidiaries might apply first, whereas crypto-native fintechs observe as soon as the framework solidifies.

The fee account formalizes crypto’s entry into Fed-supervised infrastructure. If main issuers achieve Fed accounts, the impression on liquidity and settlement high quality turns into systemic.

Fed-backed reserves can’t be frozen by a business financial institution or topic to intermediate establishment credit score danger, compressing settlement danger throughout stress.

Regulatory arbitrage narrows as offshore issuers or these unwilling to satisfy GENIUS Act requirements lose floor to US-regulated issuers providing Fed-backed tokens with structural security benefits, consolidating market share amongst compliant companies.

Waller’s proposal opens a payment-only door into the Fed below steadiness caps and tight restrictions, revives slender banking, positions compliant stablecoins as central bank-backed devices, and creates a degree taking part in area whereas disintermediating some business financial institution companies.

The coverage shift integrates crypto into the funds system below supervision, with direct settlement lowering fragility and recognizing that digital asset infrastructure has moved from the fringes to the core of how {dollars} transfer.