The Federal Reserve unveiled a proposal to create restricted payment accounts designed for fintech companies and crypto-affiliated banks. These “skinny master accounts” would allow eligible nonbank financial institutions limited access to the Fed’s payment infrastructure without the full privileges traditional banks enjoy, such as interest earnings or access to central bank credit facilities.
This initiative coincides with the Fed urging its regional Reserve Banks to pause decisions on Tier 3 master account requests until the end of 2026. This temporary hold, announced alongside the proposed rulemaking, aims to gather public feedback and ensure consistent regulatory application across these specialized accounts.
Unlike full master accounts, which provide broad access to the Federal Reserve’s services, the proposed skinny accounts would only support clearing and settlement activities. They would exclude features such as earning interest, accessing the discount window, or utilizing intraday credit, reflecting a more cautious regulatory stance toward the fintech and crypto sectors.
This move follows political debates sparked by a previous executive order under President Donald Trump, which encouraged broader integration of fintech services and digital assets into the financial system. However, despite political support for crypto adoption, direct Fed master account access remains off-limits to cryptocurrency exchanges, requiring them instead to operate through federally regulated affiliates that meet the eligibility criteria under the Federal Reserve Act.
Among the Tier 3 institutions awaiting approval prior to the pause was Kraken Financial, the banking subsidiary of the cryptocurrency exchange Kraken. This firm secured a limited-purpose master account under the Fed’s Tier 3 classification earlier this year, highlighting the emerging but controlled pathway for crypto-related entities to tap into Fed payment systems.
The concept of skinny accounts was initially introduced by Federal Reserve Governor Christopher Waller and has evolved through policy discussions in early 2026. The Fed’s approach reflects an effort to balance innovation in payment technology with prudent risk management, limiting extended credit or liquidity support to fintech and crypto-linked banks for now.