The Federal Reserve has taken the first step toward creating a more limited version of a so-called master account, welcoming input on how the central bank might develop a “payments account” that would allow businesses to tap into their payments track without having to jump through sizable hoops to provide more comprehensive services.
The Fed said in a statement on Friday that it is asking for information on how it will meet requests from companies that rely on new technologies to more easily tap into services “for the express purpose of clearing and settlement agency payment activities,” according to a board memo on the concept. The public comment window will be open for 45 days.
The Fed’s main account is a direct channel for financial companies to enter the central bank’s payment track. They can be difficult to obtain, which is a problem for some cryptocurrency companies.
“These new payment accounts will support innovation while maintaining the security of the payments system,” Governor Christopher Waller said in a statement. “This request for information is a critical first step in ensuring the Federal Reserve is responsive to the evolution of payments.”
Waller has previously expressed support for the idea, positioning it as a “slimming down” master account in October. In Friday’s description, the accounts pay no interest, have access to credit from the Federal Reserve and have balance caps.
Gov. Michael Barr, a Democratic appointee, served as the Fed’s supervisory chief until President Donald Trump’s administration took office. He said he objected to the requirement on the basis that it was “not specific enough in terms of safeguards to prevent institutions that we do not regulate from using accounts for money laundering and terrorism financing.”