Catenaa, Monday, February 09, 2026- US fintech trade groups are pressing the Federal Reserve to move forward with a proposal that would grant certain nonbank financial firms limited access to the central bank’s payment systems, reopening a long-running dispute over who should connect directly to the Fed’s core infrastructure.
The proposal under review would create a narrowly scoped Federal Reserve payment account allowing eligible firms to clear and settle payments directly, without granting full banking privileges or a master account. The Fed is evaluating responses to a formal request for information on whether to test the model.
Supporters, led by the American Fintech Council, argue that payment firms are currently forced to rely on sponsor banks, which they say raises costs, slows settlement and concentrates operational risk. They say a limited account could expand competition while avoiding lending authority or deposit-taking powers.
The proposed account would cap overnight balances, pay no interest, bar access to the discount window and restrict activity to settlement systems such as Fedwire and potentially FedNow.
Banking trade groups strongly oppose the plan. In a joint submission, the Bank Policy Institute, The Clearing House Association and the Financial Services Forum warned the move would mark a fundamental policy shift by allowing uninsured or lightly supervised institutions to interact directly with the Fed’s balance sheet.
Banks said the structure could increase run risk by enabling deposit-like activity outside the federal safety net. They specifically flagged stablecoin issuers and crypto-linked payment models as likely beneficiaries, citing concerns over supervision, resolution frameworks and consumer protection.
The groups also raised issues related to anti-money laundering enforcement, sanctions compliance and operational resilience if nonbanks gain direct settlement access.
The debate follows legal defeats for Custodia Bank, a Wyoming-chartered crypto institution that has sought direct Fed access. Courts have affirmed the Fed’s broad discretion to deny such requests based on financial stability considerations.
While the Fed has described the payment account as an exploratory concept, its decision could reshape the boundary between banks, fintech firms and crypto-related businesses in the US payments system.
