Congress Debates Which Firms Should Get Fed Skinny Accounts

On Wednesday, the House Financial Services Committee held a hearing on whether certain crypto and fintech firms should receive limited “skinny” master accounts that provide direct access to the Federal Reserve's payment systems.

Federal Reserve Governor Christopher Waller first proposed the skinny master account in October. A master account gives an institution a direct connection to the Fed's payment rails; firms without one rely on partner banks that hold master accounts to move funds. Dozens of formal comments have been submitted to the Fed on whether to widen access.

Republican Rep. Dan Meuser of Pennsylvania warned that opening the payment system is a weighty decision and asked who should be allowed direct access to critical payment rails.

Rachel Anderika, head of global operations at Anchorage Digital, urged clearer federal and state regulatory frameworks to support innovation, stating, “If America is going to continue to be the financial capital of the world, we need regulatory frameworks – federal and state – that allow innovation.” Anchorage Digital Bank is the first federally chartered crypto bank.

Democratic Rep. Stephen Lynch, ranking member of the committee's digital-assets subpanel, raised concerns about cryptocurrency volatility and recent fintech failures. He cited the 2024 bankruptcy of Synapse and related customer losses, noting an allegation that the company failed to maintain adequate records of customer funds.

Committee members reviewed recent regulatory steps. In March, the Federal Reserve Bank of Kansas City approved a limited purpose account for Payward, the parent company of crypto exchange Kraken. In May, the president issued an executive order directing the Federal Reserve to evaluate policies on granting fintech firms direct access to the central bank's payment rails.

Lawmakers and witnesses outlined possible conditions for expanded access, including limiting services available through skinny accounts, imposing capital and liquidity standards, requiring supervisory agreements, or maintaining third-party relationships that preserve oversight.

Community banks and some industry groups argued that nontraditional firms do not face the same supervision as banks and called for strict safety and soundness tests before any expansion. Representatives from the crypto sector said broader access would reduce reliance on bank partners that restrict services.

Committee members asked whether applicants should face bank-like examinations, what consumer protections would apply, and how the Fed would prevent contagion to the broader payments system if a fintech or crypto firm failed.

Members indicated the committee will continue oversight of the Fed's proposals and may consider legislative measures if regulators proceed with widening access.