In a significant step toward modernizing the US payments infrastructure, Federal Reserve Governor Christopher Waller formally proposed on the 21st the creation of a new “skinny master account” system. This framework would grant non-bank entities like fintech companies and stablecoin issuers direct access to the Fed’s payment rails.

The Fed just greenlit the crypto revolution, announcing a “Skinny Master Account” to plug DeFi firms directly into the US Financial System. pic.twitter.com/nSXsbBPaX8

— CryptoBuzzz ⚡️ (@CryptoBuzz11K) October 21, 2025

Governor Waller unveiled the concept at a central bank-sponsored payments innovation conference, framing it as a necessary response to the rapid pace of technological change in the financial sector.

Adapting to Payments Innovation

The proposed accounts are targeted at firms that currently provide payment services through third-party bank intermediaries. Waller stated the goal is to provide “basic Federal Reserve payment services to legally eligible institutions that primarily provide payment services through third-party banks that currently have full-service master accounts.”

This initiative is partly seen as a continuation of policy directions from the previous administration, which was supportive of crypto-related alternatives to traditional financial products. Industry analysts immediately recognized the profound implications for the crypto sector.

Jaret Seiberg of TD Cowen noted that these accounts would give crypto firms the access to traditional payment systems needed to move money in and out of the digital asset space, potentially fostering new forms of cryptocurrency investment. Seiberg predicted implementation by mid-2026, suggesting it would be a “positive for crypto firms” while potentially posing a challenge to traditional banks.

A Limited Account to Manage Risk

The “skinny” designation is key; the proposed accounts come with several restrictions designed to limit risk to the Federal Reserve and the broader financial system. These include:

• No interest paid on balances

• A cap on account balances

• A prohibition on intraday overdrafts

• Payments being rejected if the balance is zero

• No access to the Fed’s discount window for loans

Waller acknowledged this is an early-stage idea, describing it as a “prototype to clarify how things could change.” The Fed will now seek feedback from stakeholders on the proposal’s benefits and drawbacks. A central focus of the discussion will be how stablecoin issuers, in particular, might utilize this system.

Governor Waller emphasized that the account design would be tailored to fit the needs of these firms while accounting for the potential risks they might pose to the Fed and the payment system, signaling a cautious yet forward-looking approach.