The US Federal Reserve has released a proposal for limited payment accounts aimed at fintech and crypto-related firms, coinciding with President Donald Trump's recent executive order calling for broader evaluation of access to the nation's payment infrastructure.

This development marks a notable step in ongoing discussions about integrating innovative financial technologies into traditional banking systems while maintaining safeguards.

Trump's Executive Order on Financial Technology Integration

President Trump signed an executive order directing the Federal Reserve and other regulators to examine existing frameworks that may limit fintech and digital asset firms' participation in payment systems. The order emphasizes evaluating legal, regulatory, and policy aspects of access to Reserve Bank payment accounts and services for uninsured depository institutions and non-bank financial companies.

Regulators have been asked to identify options for expanding access, including potential risk controls, and to report back within a specified timeframe. This action aims to reduce barriers that have historically required fintech firms to partner with traditional banks for payment rail connectivity.

Fed's 'Skinny' Payment Account Proposal

In direct response to these policy signals, the Federal Reserve Board issued a request for comment on creating limited "skinny" master accounts, also referred to as payment accounts, for eligible nonbank financial institutions.

These accounts would provide narrower access focused primarily on clearing and settlement functions. Unlike traditional master accounts held by full depository institutions, they would exclude features such as interest earnings, discount window access, or intraday credit.

The proposal builds on earlier ideas discussed by Federal Reserve Governor Christopher Waller. It seeks to balance innovation with risk management by offering targeted access rather than full banking privileges.

Tier 3 Access and Industry Context

The Fed has encouraged regional Reserve Banks to pause decisions on Tier 3 account applications during the rulemaking process, with the pause expected to conclude by December 31, 2026. This affects pending requests from various institutions, including crypto-related entities.

Examples in this space include Kraken Financial, which previously secured a limited-purpose master account under Tier 3 classification. The crypto industry has actively sought such connections to achieve more direct integration with US payment systems.

Implications for Fintech and Crypto Sectors

The combined actions highlight a tension between political support for innovation and the central bank's cautious regulatory stance. While the executive order pushes for evaluation of expanded access, the Fed's proposal maintains limits, particularly for direct crypto exchange participation. Firms would typically need to operate through qualifying depository institution affiliates.

Industry observers note that direct or enhanced access could lower costs, improve efficiency, and foster competition in payments. However, concerns around risk management, compliance, and financial stability remain central to the discussions.

This policy evolution occurs amid growing adoption of digital assets, with recent Federal Reserve data indicating notable consumer engagement levels in crypto activities.

Next Steps and Public Input

The Federal Reserve's request for comment invites stakeholder feedback on the proposed framework. The outcome of this process, along with the Fed's report in response to the executive order, will shape future access policies for payment rails.

These developments could influence how fintech companies, stablecoin issuers, and crypto service providers interact with core US financial infrastructure in the coming years.