Fed Considering 'Skinny' Master Accounts for Crypto Banks on 'Streamlined Timeline'

In brief

Federal Reserve Governor Christopher Waller proposed offering “skinny” master accounts to innovation-focused banks, granting them qualified access to Fed payment systems.
These accounts would speed up access to the Fed’s services for crypto banks, but exclude benefits like earning interest or overdraft privileges. They could also include balance caps to manage risk.
The move could open doors for crypto institutions nationwide, though some—like Custodia Bank’s Caitlin Long—warn that eligibility rules might still leave key players out.

A key decision leader at the Federal Reserve has proposed a new path to registration with the central bank Tuesday—one that could, for the first time, unlock coveted privileges for crypto-focused financial institutions.

Federal Reserve staff is currently exploring the idea of issuing “skinny” master accounts on a streamlined timeline to institutions that haven’t yet managed to secure full-fledged ones, Fed Governor Christopher Waller announced Tuesday at a conference in Washington.

Master accounts, possessed by all federally chartered banks, allow for direct payments and access to the Fed. For years, crypto-focused institutions have tried and failed to secure them— and thus gain the coveted ability to function as national banks.

That state of affairs could now change imminently. Waller’s plan would allow U.S. institutions focused on “payments innovation”—aka, crypto and other emerging financial technologies—to gain their own access to the Fed’s services, as opposed to depending on third-party, master account-holding banks.

Such “skinny” master accounts could provide crypto banks access to Fed payment rails on a “streamlined timeline,” Waller said.

They would not provide certain benefits, though, including payments of interest on account balances or overdraft privileges. They might also impose caps on balances, in a bid to control for “various risks to the Federal Reserve and the payment system.”

Waller said updates on the potential implementation of his “skinny” master account plan will be coming soon, with the Fed conducting outreach to interested stakeholders.

Should the plan be implemented, it could remake the banking landscape in America. Even if crypto banks were restricted from certain privileges, the ability for them to function as federal banks could have significant implications for every corner of the industry, from crypto exchanges to stablecoin issuers.

Not everyone in crypto has popped open the champagne following Waller’s announcement, however. Caitlin Long, founder of Custodia, a Wyoming-chartered crypto bank that has sought for years to earn a full-fledged master account, cautioned Tuesday that Waller specified the Fed’s new program would apply to “legally eligible entities” if enacted—and that the devil is in those details.

THANK YOU, Gov Waller, for realizing the terrible mistake the Fed made in blocking payments-only banks from Fed master accounts, and re-opening the access rules the Fed enacted to keep @custodiabank out. The Fed told courts that such firms would put financial stability at risk…
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) October 21, 2025

Trust companies, for example—which custody crypto assets—may not be considered legally eligible for “skinny” master accounts, given their current inability to receive deposits, Long warned.

The executive did emphasize, though, her confidence that Custodia has already been deemed a “legally eligible entity” by the Fed.

Since the Trump administration’s permissive about-face on crypto policy this year, all manner of crypto institutions have applied for bank charters. Among them: crypto exchange Coinbase, payments processor Stripe, stablecoin issuer Paxos, USDC issuer Circle, and even Sony Bank, the financial arm of the media giant.