Fed signals crypto pivot, floats ‘skinny master account’ for stablecoin players
The Fed has accepted that crypto has become too big to be ignored.
Key Takeaways
Why is the Fed open to crypto?
According to Gov. Waller, it would reflect the changes that have happened in the sector, including stablecoins.
What’s the broader benefit of the update to the sector?
Crypto leaders believe it would offer more legitimacy and boost stablecoins and the overall tokenized market.
The U.S Federal Reserve appears ready to embrace crypto disruption, especially stablecoins. During the first-ever payment innovation conference by the regulator, Fed Governor Christopher Waller instructed the staff to accommodate stablecoin players into the U.S payment rails.
Waller suggested a limited “skinny master account” that would allow stablecoin issuers and other innovative firms access Fed’s payment rails while mitigating risks. It would also eliminate the need for partner banks.
Waller added that the sector has gone mainstream and the regulator will embrace it for payment innovations.
“This is an acknowledgement that distributed ledgers and crypto-assets are no longer on the fringes but increasingly are woven into the fabric of the payment and financial systems.”
Crypto leaders welcome the move
The so-called “master accounts” are like a direct bank account at the Federal Reserve. If fintech and crypto firms get one, then they could hold reserves directly and settle transactions instantly with the Fed. It would also cut overall costs, which increase if they are forced to go through a middleman.
Some of the beneficiaries of Waller’s proposal would be Ripple, especially since it applied for a Fed master account and banking charter this year.
The conference was attended by top crypto and tech leaders, and they hailed the move as a game-changer. For his part, Nathan McCauley, CEO and Co-Founder of Anchorage Digital, said,
“This will enable a whole host of opportunities to further the US as the leader in payments and stablecoins.”
According to Rob Hadick, General Partner at VC firm Dragonfly, the pivot would make adoption of tokenized assets and stablecoins inevitable.
Cuy Sheffied, Head of Crypto at Visa, called the move “powerful,” while Fundstrat’s CIO Tom Lee viewed it as a preparation for onboarding Wall Street.
He said,
“This is a step towards facilitating moving Wall Street onto the blockchain.”
Worth pointing out, however, that the Fed, especially during the Biden era, has been cautious about the sector in the past.
In fact, some crypto-focused banks like Custodia Bank were denied access to a Fed master account. The argument? Crypto is “inherently unsafe,” “unsound,” and could pose a financial stability risk.
Caitlin Long, founder of Custodia Bank, praised Gov. Waller’s pivot. She added that they have tried to get access for five years.
Under the current pro-crypto administration, most of the regulators, including the Fed, have pivoted. In fact, even banks were barred from supporting digital assets during Biden’s reign.
By April 2025 though, most of the anti-crypto directives had been rolled back.
