President Donald Trump’s latest executive order directs the Federal Reserve to evaluate granting non-bank crypto and fintech firms direct access to the U.S. payment system within 120 days, escalating a long-running battle over control of the nation’s financial plumbing.
"For too long, fintech firms have been shut out while legacy institutions enjoy privileged access," Senator Cynthia Lummis said, framing the directive as a correction to years of restricted access. She added that the administration’s order was aimed at creating a more level playing field, stronger competition, and lower payment costs for consumers.
The order, titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” signed on May 19, requires the Fed to assess whether its master account framework can be extended to non-bank companies and to clarify if regional Fed banks can approve applications independently. It also sets 90-day and 180-day deadlines for other financial regulators—including the SEC and CFTC—to identify and act on rules that impede fintech innovation and partnerships with banks.
At stake is access to Fedwire, the high-value payment system that has historically been the exclusive domain of licensed depository institutions. Gaining direct access would allow crypto firms to reduce their reliance on intermediary banks, lowering costs and settlement risks for companies like Kraken, Ripple, Coinbase, and Circle.
Kraken’s recent approval for a limited-purpose account provides a practical example of how expanded access might function. In March, the Kansas City Fed granted Kraken Financial, the exchange's banking unit, a restricted connection to the Fed’s payment system, setting a precedent for other digital asset companies.
The arrangement does not include all services available to insured banks, such as interest on reserves or access to Fed credit, but it allows the firm to access core payment rails for high-value dollar settlement. This "skinny" master account model could become a template for other crypto firms, allowing them to move dollars through Fed systems while imposing safeguards to mitigate risk.
Caitlin Long, founder of Custodia Bank, which lost a 2023 court fight for a master account, welcomed the order, stating it recognizes a "continuing problem at the Fed with blocking legally eligible institutions from the US payment system."
Several major crypto firms are positioned to benefit from a broader Fed access framework. Ripple has a pending application for a master account and has supported the idea of a restricted account to support its new RLUSD stablecoin by enabling faster reserve movements.
Coinbase and Circle, partners behind the USDC stablecoin, have a federal trust-bank structure that could deepen their integration with regulated financial infrastructure. A direct or limited Fed account could make managing dollar liquidity for stablecoin redemptions more efficient, especially during periods of market stress. Other firms like Anchorage Digital, Paxos, and BitGo have also secured approvals for national trust bank structures, moving them closer to the regulated status that could support a payment access application.
The banking industry is pushing back against the move. The American Bankers Association (ABA) responded to the order by stating that any company offering bank-like services must meet the same "rigorous regulatory and consumer-protection standards as banks."
"Unless everyone is held to the same high standards, the financial system and consumers will be at risk," said ABA President and CEO Rob Nichols.
Banks argue that access to Fed payment systems is a privilege tied to intense supervision, capital requirements, and liquidity rules. They contend that granting access to firms with narrower charters could introduce systemic risk, citing concerns over operational failures, money-laundering controls, and potential liquidity drains from the traditional banking system. The Fed has signaled that restricted accounts could mitigate these risks, but the policy debate over what constitutes a level playing field is set to intensify over the next 120 days.
This article is for informational purposes only and does not constitute investment advice.
