Trump orders review of Fed ‘master account’ rules for crypto firms – Details
Banking lobby wants crypto firms to face similar rigorous regulatory requirements if they want to operate as banks
U.S. President Donald Trump is pushing for a review to allow crypto firms and other fintechs to access Federal Reserve payment rails.
In an executive order on Tuesday, the 19th of May, Trump instructed federal regulators to evaluate and remove current policies that hinder financial innovation.
To foster this financial innovation, the Federal Government must update regulations to allow integration of digital assets and innovative technology into traditional financial services and payment systems.
Trump gave regulators three months to identify policies hindering financial innovation. Within six months, agencies are expected to recommend changes improving fintech and crypto firms’ access to the Fed’s ‘master accounts.’
These are access that allow players into the Fed’s wholesale payment systems and have been reserved for banks.
The move also appeared tied to broader concerns around debanking during the Biden administration. Many crypto firms and startups argued they were systematically pushed away from traditional banking services.
Sen. Warren opposes crypto firm’s national trust licenses
Separately, Senator Warren called out the Office of the Comptroller of the Currency (OCC) for approving Ripple, Circle, and other crypto firms for a national trust license.
Allowing national trust companies to act like full-service national banks, while evading the suite of restrictions, safeguards, and obligations that apply to full-service national banks, would pose clear risks to consumers.
She added that the move would threaten the “safety and soundness of the banking system.” Ahead of the GENIUS Act rollout, nine crypto firms reportedly received OCC licenses to enter the custody market for stablecoin reserves.
But Warren warned that,
These companies are effectively crypto banks that want to evade the fundamental safeguards and obligations that come with being a bank.
She also urged regulators to submit all applications and supporting documents tied to the approvals, including any links to Trump’s crypto ventures.
Reacting to Trump’s order, the American Bankers Association (ABA) called for crypto firms to face similar regulatory standards. They stated,
We urge the banking regulators to conduct their requested review in a way that allows for innovation but doesn’t compromise the safe and sound financial system we have today.
Final Summary
- Trump ordered regulators to review policies that would let crypto firms and fintechs access its payment rails
- But Sen. Warren and the banking lobby want crypto firms to adhere to the same rigorous regulatory requirements.
