• The Federal Reserve is exploring a new class of limited 'payment accounts' that would grant select non-bank financial firms direct access to its payment rails.
  • These accounts would not pay interest, provide credit access, or carry full master-account privileges, and would be subject to balance caps to mitigate risk.
  • The move aims to foster innovation in payments while maintaining strict controls, with a public feedback process expected as the concept develops further.

In a significant step toward modernizing the U.S. payments landscape, Federal Reserve Governor Christopher Waller outlined a prototype concept for "payment accounts"—dubbed "skinny" master accounts—at the Fed's first Payments Innovation Conference on October 21, 2025. According to people familiar with the matter, the proposal targets legally eligible institutions, including certain fintech and crypto firms, that currently rely on third-party banks for clearing and settling payments.

Waller stressed that this is a preliminary idea, not yet a formal rulemaking, and emphasized the Fed's intent to "embrace the disruption, don't avoid it," explicitly referencing innovations from the crypto sector. The accounts would offer direct access to Federal Reserve payment rails like Fedwire and FedACH, but without interest, daylight overdraft privileges, or access to the discount window. Balance caps would be imposed to limit systemic risk, and a streamlined review process would focus on lower-risk payments innovators.

Efforts to expand payment access have hit a snag in recent years, with the Fed's 2022 guidelines tightly restricting master accounts largely to depository institutions. Waller's concept is framed as a middle path, working within legal eligibility rules while tailoring service levels. "We're looking at how to support innovation while protecting the payments system," Waller said, according to sources who attended the conference. The Fed has not yet released a formal proposal, and attempts to reach officials for additional comment were unsuccessful.

This move aligns the U.S. more closely with international practices, such as the Bank of England's RTGS.next and the European Central Bank's 2025 framework, which already provide central-bank accounts to non-bank payment service providers with similar restrictions. In the short term, Fed staff will analyze the concept and solicit stakeholder feedback, with key design decisions—like specific balance caps and application standards—still open. Without such accounts, eligible firms would continue to face higher costs and potential delays through correspondent banks.

Industry reactions have been mixed. Some fintech executives welcome the potential for reduced reliance on banks, which could lower operational hurdles. However, bankers caution that the limited nature of these accounts preserves their core franchise, as they exclude credit and liquidity benefits. The proposal comes amid rapid growth in digital wallets and tokenized assets, and ongoing policy debates around stablecoins. If implemented, it could influence how stablecoin issuers integrate with the dollar system, using accounts for payment flows rather than holding reserve assets.

Correction: An earlier version of this article misstated the date of the conference; it was October 21, 2025, not 2024.