Crypto firms and bank groups clash over the Fed’s proposed payment account

The Federal Reserve is inching toward a compromise on a fight that has dragged on for years: who gets direct access to the central bank’s payment infrastructure.

In December, the Fed asked for public input on a prototype “payment account,” a special-purpose Reserve Bank account designed for the narrow task of clearing and settling an institution’s own payment activity. The account would come with explicit constraints, including no interest on balances, no intraday credit, and an overnight balance cap set at the lesser of $500 million or 10% of total assets. The Fed also outlined that payment accounts would only connect to payment services with automated controls to prevent overdrafts.

The comment window has now closed, and the letters show two camps talking past each other.

Crypto-native institutions and payments groups largely framed the proposal as risk reduction. Anchorage Digital Bank said direct access matters for minimizing counterparty risk and improving operational efficiency, but argued the prototype needs fixes on issues such as overnight limits and which payment rails are included. Fintech trade groups made a similar point, urging the Fed to include access to core rails like FedACH rather than limiting the account to a narrower subset of services. 

Large bank trade associations pushed back hard. In a joint response, the Bank Policy Institute, the Financial Services Forum, and The Clearing House warned that giving direct access to institutions that lack federal deposit insurance and comprehensive prudential supervision could raise operational and systemic risks. They supported limits like no overdrafts and no discount window access, but asked for additional guardrails, including stricter caps, tougher monitoring, and rules that prevent pass-through structures that could benefit ineligible affiliates. 

What happens next depends on how the Fed balances speed and safety. The staff memo suggests reviews could be streamlined and completed within 90 days once an applicant submits the required documentation, but Reserve Banks would still retain discretion to approve or deny requests. For crypto firms, the proposal is a test of whether “direct settlement” can move from talking point to policy. For banks, it is a line-drawing exercise: how to modernize payments access without creating a parallel tier of quasi-banks plugged into the same rails.