The U.S. Federal Reserve is exploring the concept of “skinny” or limited master accounts for entities seeking payment access without meeting the full stringent requirements traditionally imposed by the Fed. This initiative aims to facilitate companies and financial services operating outside conventional banking, particularly those involved in cryptocurrencies and digital payments. Master accounts, which are central accounts held directly with the Federal Reserve, enable financial institutions and banks to process payments but come with strict legal and operational demands that often restrict access for smaller or newer financial firms. Under the proposed framework, entities with limited master accounts would gain payment capabilities while being subject to fewer restrictions, thereby supporting the growth of cryptocurrencies and other emerging financial technologies. As digital currencies and blockchain adoption increase, central banks are expected to implement measures adapting traditional financial systems to the digital era. The Federal Reserve’s move seeks to enhance participation in crypto and digital payment systems, potentially improving financial inclusion and transparency. Nonetheless, such facilities also raise concerns regarding financial risks, regulatory oversight challenges, and fraud potential, which the central bank must carefully address. Further detailed policies and regulations are anticipated to ensure financial stability and secure the use of cryptocurrencies in the future.
Source: coindesk
