U.S. banking lobby groups have formally objected to proposals that would allow cryptocurrency and fintech firms direct access to the Federal Reserve’s payment systems, in a dispute that is reshaping debate over the future of core financial infrastructure.
In a joint comment letter to the Federal Reserve, organisations including the Bank Policy Institute, the Clearing House Association and the Financial Services Forum urged regulators to delay implementation of the so-called “payment account” framework. They called for a 12-month track record of sound operations before any non-bank entity, particularly newly licensed stablecoin issuers, can apply for access to the central bank’s payment rails.
The banks’ submission highlights concerns about supervisory oversight and systemic risk. According to the letter, the Federal Reserve does not currently possess direct regulatory authority over many potential applicants and lacks sufficient experience with their business models, which in the view of the signatories could heighten run-type risks if direct access were granted prematurely. They argued that stablecoin issuers should first demonstrate safe and sound operating history before being permitted to participate in Fed payment networks.
Crypto and fintech stakeholders have countered that the restrictions embedded in the proposal, including balance caps and limited service scopes, effectively keep them dependent on partner banks for access to clearing and compliance infrastructure. Critics contend that indirect access imposes frictions and costs that impede the efficiency of payment innovation.
The debate over so-called “skinny” accounts is occurring against the backdrop of broader regulatory work under the Genius Act and ongoing discussion of appropriate frameworks for stablecoin regulation, although final rules remain incomplete. Banks have also emphasised layered requirements such as robust anti-money-laundering controls and phased implementation approaches to mitigate risks associated with expanding access.
While the Fed’s proposal aims to broaden participation in the U.S. payment system, the unresolved dispute between traditional banks and crypto proponents over eligibility criteria and risk safeguards adds complexity to the timetable and design of any final rule, leaving the pathway to direct access unclear.
