The Federal Reserve is weighing whether to grant crypto and fintech firms direct access to Fed accounts, a move that would let them settle payments without going through traditional banks. Congress is now pushing back on how the Fed plans to decide who gets that access.
The debate centers on what the Fed calls "skinny" accounts, stripped-down deposit accounts that would bypass the standard banking system. Proponents argue the accounts reduce settlement delays and cut counterparty risk. But lawmakers worry the Fed hasn't spelled out clear criteria for who qualifies, creating room for regulatory arbitrage and competitive disadvantage among applicants.
Representatives raised concerns that crypto firms and stablecoin issuers might receive preferential treatment, according to reporting on the congressional discussions. The unease reflects a broader tension: direct Fed access could insulate certain fintech players from banking oversight, yet deny it to others operating in the same space.
No formal bill has emerged from the debate, and the Fed has not published detailed account specifications or eligibility rules. The timeline for any formal proposal remains unclear. The issue sits at the intersection of banking regulation, monetary policy, and the Fed's role as a backstop for the financial system. Lawmakers have signaled they want visibility into how the Fed defines "critical infrastructure" and decides which firms meet that bar before accounts open.