U.S. Fed Proposes New Type of Account for FinTech Companies

The Fed no longer views the decentralized finance (DeFi) industry with suspicion and now plans to collaborate with it to promote innovation in payment technologies. This was announced by Christopher Waller, Member of the Fed’s Board of Governors, during his speech at the first Payments Innovation Conference in Washington, D.C. According to Waller, distributed ledger technologies and crypto-assets became part of the financial system’s core structure rather than its periphery.

The official also stated that the regulator is exploring the possibility of introducing a new type of payment account, “skinny” master accounts, which would be available to all legally authorized organizations engaged in payment innovation. These accounts, Waller explained, are meant to serve as a simplified alternative to traditional Fed master accounts, giving FinTech companies easier access to the U.S. payment infrastructure.

The initiative aims to help innovative companies implement new solutions faster, avoiding lengthy approval procedures. Such accounts, however, won’t earn interest on balances, have access to intraday credit, or use the discount window, but will allow direct payments through the Fed’s infrastructure. To mitigate risks, balance limits may also be introduced.

Waller reminded that the Fed’s participation in payment technology development has a history spanning over a century, from transporting paper checks by rail and telegraphic transfers to modern real-time payment systems. He emphasized that the regulator is now ready to become an active participant in the technological revolution, not merely an observer.

It was also revealed that the Fed is conducting research into asset tokenization, smart contracts, and the use of artificial intelligence in payment systems. These projects aim to modernize the financial infrastructure and improve the efficiency of the national payment system.