- Arthur Hayes says the Fed’s proposal could free Tether from dependence on traditional banking intermediaries.
- The “skinny master account” model would allow direct access to Fed payment methods for crypto and fintech institutions.
- Tether’s major partners include Cantor Fitzgerald and Bahamian banks, with Anchorage handling its new U.S. stablecoin reserves.
Arthur Hayes criticized Tether’s dependence on traditional finance after the Federal Reserve proposed allowing crypto institutions direct access to its payment network. “Imagine if Tether didn’t need to rely on a shitty TradFi bank for its existence,” the BitMEX founder said, adding that the Fed’s move is “Trump’s revenge for debanking his family.”
Fed Proposal Targets Banking Intermediaries
Federal Reserve Governor Christopher Waller announced the plan during the Payments Innovation Conference in Washington on October 21. The proposal introduces “skinny master accounts,” a limited-access system that would let legally eligible fintech and crypto firms interact directly with the Fed’s payment rails. This approach would remove the need for commercial banking intermediaries that currently handle settlement and custody for stablecoin issuers.
The model could significantly affect firms like Tether, which manage large reserves through multiple traditional and offshore banks. Direct access to the Fed could streamline dollar transfers and liquidity management while reducing exposure to the risks of intermediary banks.
Tether’s Complex Network of Banking Partners
Tether Limited, issuer of the $160 billion USDT stablecoin, maintains reserves primarily in U.S. Treasuries and cash equivalents. Cantor Fitzgerald serves as its main U.S. custodian, managing the bulk of Treasury holdings that generate most of its yield. This partnership has been key to Tether’s profitability, contributing to its reported $13 billion profit in 2024.
However, much of Tether’s daily operations run through offshore banks in the Bahamas. Capital Union Bank, Ansbacher, and Britannia Bank & Trust handle reserve custody and high-volume client transfers. These institutions enable Tether to process redemptions and maintain global liquidity outside the U.S. regulatory perimeter.
Anchorage Partnership Expands U.S. Presence
In 2025, Tether broadened its U.S. footprint through Anchorage Digital Bank, a federally chartered crypto institution. Anchorage oversees reserves for Tether’s new U.S.-based stablecoin, USAT, launched in September 2025. While this marks a change toward regulated partners, Tether’s main operations remain centered around offshore entities.
Hayes’ comments indicate the tension between crypto firms and the traditional banking system. If the Fed implements the “skinny master account” model, firms like Tether could gain direct financial access, removing one of their biggest structural dependencies.
