Seven banking associations have opposed the planned direct access of crypto and fintech firms to the Federal Reserve's payment systems. A total of 44 comment letters arrived by the end of the comment period on February 6.
These groups are calling for stricter requirements, longer review periods, and federal supervision for all applicants. Stablecoin issuers and fintech associations, on the other hand, criticize the proposal as too restrictive. At the core of the dispute are so-called "payment accounts," which the Federal Reserve proposed in December 2025. Informally referred to as "skinny master accounts," they would give non-banks limited access to Fedwire and other Fed payment systems for the first time. Fed Governor Christopher Waller targets implementation in Q4 2026.
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Payment accounts: limited access to the Fed system
On December 19, 2025, the Federal Reserve published the proposal. Its publication in the Federal Register followed on December 23. Payment accounts differ fundamentally from regular master accounts. Holders receive no access to Fed credit facilities, the discount window, or interest payments on balances. As a result, the purpose remains limited to clearing and settlement of the holder's own payments.
Balance limits sit at $500 million or 10 percent of the account holder's total assets, whichever is lower. Only "eligible financial institutions" with a qualifying charter may apply, such as those holding a national trust charter or a Wyoming SPDI license. Unlicensed fintechs or non-bank stablecoin issuers without the appropriate authorization consequently remain excluded.
The stakes are considerable. In 2022 alone, Fedwire processed roughly 196 million transfers worth over one quadrillion dollars. More than 9,200 institutions currently participate. For stablecoin issuers, direct access would prove particularly significant. It would eliminate their dependence on traditional banks for issuing and redeeming stablecoins.
Banking lobby sees systemic risks
Opposition formed quickly. Three of the largest associations filed joint objections: the Bank Policy Institute (BPI), the Financial Services Forum, and the Clearing House Association. Their position is clear: direct access for less regulated institutions could increase risks in the payment system and jeopardize financial stability.
Specifically, the banking groups identify stablecoin issuers and crypto firms as the most likely beneficiaries. According to the opposition, their business models resemble deposit-taking, but without deposit insurance, without a resolution regime, and without consolidated supervision. In the view of the American Bankers Association (ABA), many eligible institutions lack a long-term supervisory track record. They are not subject to uniform federal safety and soundness standards.
Accordingly, the list of demands is extensive. These associations call for twelve months of demonstrated safe operations before application, direct federal supervision, and strict limits on balances and transactions. Additional requirements include BSA/AML compliance, a ban on pass-through arrangements, and credible recovery and resolution plans. Finally, the ABA pushed for a phased "crawl, walk, run" approach for applicants.
Crypto industry considers the proposal too narrow
On the other side stand fintech and crypto associations, who criticize the proposal from the opposite direction. Representing companies including eBay, Klarna, and Amazon Pay, the Financial Technology Association (FTA) described the payment accounts as too limited. Such restrictions could result in firms remaining dependent on banks. In addition, the FTA objected to blocking ACH access. It called the overnight balance limit disproportionately restrictive for large payment processors with billions in volume.
Meanwhile, the Blockchain Payment Consortium (BPC) pointed to the $4 trillion digital asset market and called for the balance limit to rise by 30 to 40 percent. At the same time, the BPC demanded access to Fedwire Securities for direct Treasury settlement without banks as intermediaries.
Circle, the issuer of the USDC stablecoin, described the payment accounts as an important first step toward implementing the GENIUS Act. With a market capitalization of roughly $75 billion, USDC ranks among the largest stablecoins globally. In its comment letter, the company stated:
"Access to Federal Reserve services will play an important role in the operational and liquidity management of permitted payment stablecoin issuers." - Circle comment letter
Custodia and TNB: how the Fed has handled applications so far
This conflict has precedents. Custodia Bank, a Wyoming Special Purpose Depository Institution with a crypto focus, applied for a master account at the Federal Reserve Bank of Kansas City in October 2020. After a rejection and two lost court cases, courts confirmed that Fed banks hold the discretion to deny applications, even when statutory eligibility exists. Judge Scott Skavdahl put it plainly in his March 2024 ruling:
"If the Federal Reserve Banks do not have the authority to deny master account applications, state licensing laws would be the only protective layer for the US financial system." - Judge Scott Skavdahl, U.S. District Court Wyoming
In October 2025, the 10th Circuit Court of Appeals upheld the ruling. Meanwhile, The Narrow Bank (TNB) had waited for a master account since August 2017 and received a denial in February 2024. TNB subsequently lost in court as well. Both cases show that the Fed has consistently resisted expanded access for non-banks.
Now the Fed evaluates the 44 comment letters received. Governor Waller sticks to the timeline and aims to make payment accounts available in Q4 2026. In parallel, the deadline for implementing GENIUS Act executive orders expires on July 18, 2026. Whether the banking lobby's demands will delay the timeline remains open.
