The Federal Reserve issued a revised proposal for limited master accounts on May 20, 2026, formally expanding access to Fed payment infrastructure for crypto firms and other non-bank entities. The proposal, which follows Fed Governor Chris Waller’s October 2025 concept of “skinny accounts,” opened a 60-day comment period and signals regulatory willingness to integrate digital asset companies into core banking rails without granting full master-account privileges.
From Concept to Federal Rule
Fed Governor Chris Waller first floated the “skinny accounts” framework in October 2025 as a middle ground between complete exclusion and unrestricted access. The Federal Reserve Bank of Kansas City moved faster, approving Kraken—a crypto bank and trading platform—for a limited master account in March 2026, demonstrating both demand and operational feasibility at the regional level. The May 2026 revised proposal formalizes what was initially a request for information issued in December 2025, which drew feedback during a 45-day comment period. The shift from regional approval to federal rule-making reflects growing pressure to standardize crypto access across the 12 Federal Reserve banks.
Restricted Access With Built-In Controls
The skinny account structure deliberately constrains privileges to reduce systemic risk. Account holders would not access intraday credit—the Fed’s primary lending facility—nor the discount window, two mechanisms traditionally reserved for full-fledged banks. They also earn no interest on Fed balances and face automated overdraft prevention controls. Closing balance limits are pegged to expected payment activity, with the revised proposal increasing the maximum closing balance threshold. These restrictions create a tiered access model: payment settlement speeds and cost reduction without exposure to emergency lending or overnight funding markets.
Political Momentum and Regulatory Uncertainty
President Trump issued an executive order on May 19, 2026—the day before the Fed’s revised proposal—directing a review of Fed payment access policies and regional bank independence in granting accounts. The timing underscores political support for crypto banking infrastructure while introducing uncertainty about final rule parameters. The Fed has already asked regional banks to pause certain applications pending federal rule completion, effectively centralizing a decision previously distributed across regional banks. This consolidation may slow individual approvals but will create uniform standards for the sector.
Next Steps and Timeline Unknowns
The 60-day comment period ends in July 2026, but the Fed has not disclosed a timeline for final rule adoption. Kraken’s March approval demonstrates that crypto firms can operate under limited master accounts, yet the broader framework remains incomplete. The revised proposal’s closure of the Kraken loophole—where regional bank discretion enabled faster approval—suggests the Fed intends tighter federal control over future account issuance.
