- Federal Reserve proposed payment accounts for eligible crypto and fintech firms to access clearing and settlement systems.
- Payment account holders would face limits on interest, overdrafts, intraday credit, and Fed borrowing access.
- The Fed urged Reserve Banks to pause most Tier 3 crypto account decisions through December 2026.
The Federal Reserve on Wednesday opened a public comment period on a proposed “payment account” framework for eligible financial institutions, including crypto and fintech firms. The proposal would allow qualifying institutions to access the Fed’s payment system for clearing and settlement purposes. Meanwhile, the Board also urged Reserve Banks to pause most new Tier 3 account decisions until December 2026 during the policy review process.
Fed Expands Review of Payment Account Proposal
According to the Federal Reserve, the proposed payment account closely follows a prototype released in December 2025. The earlier request for information drew public feedback before the comment period closed in February.
The proposal targets legally eligible financial institutions seeking direct payment system access. Notably, many applicants currently operate without federal insurance coverage.
Federal Reserve Governor Christopher Waller previously led the payment account initiative. Now, the Board has moved into the next stage of the implementation process.
The proposal would allow institutions to clear and settle payments directly through Federal Reserve services. However, the accounts would carry several restrictions.
Limits Remain Under Proposed Framework
Under the proposal, payment account holders would not receive interest on balances held with Reserve Banks. They also would not access intraday credit or the Federal Reserve discount window.
Additionally, the accounts would include automated controls preventing overdrafts during payment processing activities. The Board said those measures would reduce operational risks across the payment system.
The Federal Reserve also stated the framework would not expand current legal eligibility requirements for account access. Instead, Reserve Banks would continue evaluating applicants under existing rules.
Notably, the proposal requires payment account holders to manage illicit finance risks. The Board reaffirmed those expectations in Wednesday’s release.
Fed Requests Pause on Tier 3 Decisions
Alongside the proposal, the Federal Reserve encouraged Reserve Banks to temporarily pause new Tier 3 access decisions. Most crypto-related firms currently fall under that category.
According to the Board, the pause would remain until no later than December 2026. Officials said the temporary measure would support consistent implementation across Reserve Banks.
The Federal Reserve also adjusted several provisions after reviewing earlier public feedback. For example, the proposal raises the maximum closing balance limit tied to expected payment activity.
The Board is now accepting additional public comments as it continues developing the payment account framework.
