President Donald Trump signed an executive order on May 19, 2026 directing the Federal Reserve to evaluate giving crypto and fintech firms direct access to its payment infrastructure within 120 days. One day later, on May 20, the Fed opened a 60-day public comment period on a new “skinny master account” framework that could let qualifying crypto custodians, stablecoin issuers, and digital-asset banks settle U.S. dollar payments without going through a sponsor bank.
The order, titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” sets parallel deadlines for six federal regulators, including the SEC, CFTC, OCC, FDIC, CFPB, and NCUA, to review fintech bank chartering barriers within 90 days. A master account is the ledger an institution holds at a Federal Reserve Bank that lets it move dollars directly through Fedwire and other central bank rails, instead of routing payments through a commercial bank intermediary.
Key takeaways
- Trump signed an executive order on May 19, 2026 giving the Federal Reserve 120 days to evaluate direct payment-system access for crypto and fintech firms.
- The Fed responded on May 20 by opening a 60-day public comment period on a limited “payment account,” also called a skinny master account, that excludes intraday credit and interest on balances.
- Reserve Banks have been told to pause Tier 3 master account decisions, which cover most crypto-native applicants, through December 2026 while the policy is finalized.
- Kraken Financial received the first crypto master account in March 2026 from the Kansas City Fed, setting an unresolved precedent the new framework is meant to address.
Published: May 23, 2026 09:00 UTC
What the executive order actually requires
The order asks the Federal Reserve Board to “conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non-bank financial companies, including those engaged in digital assets and other novel financial activities.” The Board has 120 days to deliver a report to the White House.
A separate 90-day track instructs six financial regulators to identify rules that limit fintech bank charters. Agency heads then have 180 days to act on the findings, coordinated by the White House Assistant for Economic Policy. The order defines “fintech firm” broadly enough to capture stablecoin issuers, custodians, and most regulated crypto activity in the United States, according to CoinDesk’s reporting.
The Fed’s “skinny” payment account proposal
The Federal Reserve published its proposal in the Federal Register on May 20, opening a 60-day window for public comment. The new product, internally referred to as a payment account and externally nicknamed a skinny master account, would let eligible non-bank institutions clear and settle payments through the Fed without holding a full master account.
The trade-offs are explicit. Holders cannot tap intraday credit, cannot access the discount window, and earn no interest on balances. They must comply with anti-money-laundering rules and operate under automated controls designed to prevent overdrafts. An institution can hold either a payment account or a master account, not both.
The Federal Reserve also asked Reserve Banks to pause decisions on Tier 3 applications, the category that covers uninsured crypto-native firms, until the policy is finalized. The Block reported the pause is expected to run through December 2026.
Why this matters for the crypto industry
Direct Fed access removes a structural cost and a single point of failure. Crypto firms currently rely on partner banks to move customer dollars, an arrangement that proved fragile after the 2023 closures of Silvergate and Signature. A payment account would let stablecoin issuers, exchanges, and custodians settle dollar transfers without depending on a commercial bank’s willingness to keep them as clients.
The proposal also matters because it formalizes what has so far been a case-by-case process. The Kansas City Fed approved Kraken Financial for a limited-purpose account in March 2026, the first such approval for a crypto firm. The Sullivan & Cromwell memo on that decision noted it appeared to predate a finalized framework, creating uncertainty for other applicants. The Fed’s new proposal is, in effect, the rulebook Kraken’s approval lacked.
Regulatory pushback and timeline
Traditional banking groups have raised concerns that opening Fed rails to non-banks could shift risk into the central payment system without the deposit insurance and supervisory regime that applies to chartered banks. Representative Maxine Waters has already pressed the Kansas City Fed over the Kraken approval, signaling that congressional Democrats may scrutinize each new applicant.
The Financial Technology Association welcomed the order, calling it “a win for the millions of Americans who rely on fintech products.” A stablecoin is a cryptocurrency designed to maintain a fixed value, usually pegged to the U.S. dollar, by holding reserves of cash or short-term Treasuries. Stablecoin issuers like Circle and Paxos are among the firms most likely to seek the new accounts because dollar settlement is the core of their product.
The 60-day comment window closes in mid-July 2026. The Fed’s 120-day report under the executive order is due in mid-September. Tier 3 application decisions remain paused until at least December. Any operational rollout of the new accounts would likely come in early 2027, assuming the proposal survives rulemaking and any congressional review.
Frequently asked questions
What is a Federal Reserve master account?
A master account is the account an institution holds directly at a Federal Reserve Bank. It allows the holder to send and receive U.S. dollar payments through Fed-run systems such as Fedwire and FedNow without using a commercial bank as an intermediary. Until 2026, master accounts were generally limited to insured depository institutions.
How is a “skinny” master account different from a regular one?
The proposed payment account lets holders clear and settle payments through the Fed but blocks access to intraday credit, the discount window, and interest on balances. It is designed for non-bank firms, including crypto custodians and stablecoin issuers, that need payment rails but do not function as full depository institutions.
When will crypto firms be able to apply?
The Federal Reserve has paused Tier 3 master account decisions through December 2026 while it finalizes the new framework. Public comments on the proposal are due roughly 60 days after the May 20 publication. The earliest realistic timeline for operational applications under the new rules is early 2027.
