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Federal Reserve Governor Chris Waller has proposed a new “limited-access” or “skinny” master account, a move that could fundamentally change how crypto payment companies interact with the American banking system.

What Is a Skinny Master Account?

Announced on October 21, 2025, during the Federal Reserve’s Payments Innovation Conference, the “skinny master account” is designed to give legally eligible institutions direct access to the Fed’s payment rails without needing to rely on intermediary banks.

Unlike traditional master accounts, this limited-access model wouldn’t offer full privileges such as borrowing from the Fed or earning interest on reserves. However, it would still allow fintechs, stablecoin issuers, and crypto payment companies to send and receive payments directly, faster, cheaper, and more securely.

Why This Matters for Crypto

The proposal could transform how digital asset firms operate in the U.S. For years, companies like Custodia Bank, Kraken, Circle, and Anchorage have struggled to gain Fed approval for master accounts, with Custodia even taking the central bank to court.

Now, this new framework provides a clear pathway. By allowing crypto firms to connect directly to the Fed’s core infrastructure, the U.S. is hinting that digital assets are becoming part of mainstream finance, not competitors to it.

If approved, stablecoin issuers could effectively operate as extensions of the U.S. dollar system, embedding crypto more deeply into global payments and treasury ecosystems.

Ripple and Others Stand to Benefit

Companies such as Ripple and Anchorage, both of which applied for master account access earlier this year, could be among the biggest beneficiaries. Ripple, in particular, has long aimed to bridge the gap between traditional banking and blockchain settlement systems.

By gaining direct access to Fed payment rails, Ripple and similar firms could eliminate the need for partner banks, enabling near-instant settlements, reduced transaction costs, and enhanced liquidity for both institutional and retail users.

A Step Toward Unified Financial Infrastructure

For the first time, the Federal Reserve is acknowledging the need to integrate innovative financial institutions directly into its ecosystem, ensuring both innovation and regulatory oversight.

As Governor Waller described, the goal is to “support payment innovation while managing systemic risks.” In practice, this means crypto firms, stablecoin issuers, and fintech platforms could soon operate within a regulated, Fed-connected environment — an outcome that could accelerate the merging of digital and traditional finance.

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Filed under: Bitcoin - @ October 21, 2025 4:21 pm