President Trump signed an executive order on May 19, 2025, directing the Federal Reserve to review whether crypto and fintech companies should gain direct access to Fed payment rails. The order, titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” does not immediately grant access but mandates a policy evaluation on payment-account eligibility for non-bank financial institutions. The move signals potential structural change to a decades-old banking privilege that has forced crypto firms to route high-value transactions through intermediary banks.
Why the Fed Controls Payment Access
Fed master accounts provide direct connection to Fedwire, the Federal Reserve’s real-time gross settlement system for high-value dollar transfers. Currently, only depository institutions—traditional banks and credit unions—qualify for master accounts. Crypto exchanges, stablecoin issuers, and fintech firms must route payments through intermediary banks, adding settlement delays and operational costs. This structural barrier has frustrated crypto companies seeking faster reserve settlement for stablecoins like USDC and RLUSD, where market confidence depends on rapid redemption capability. The Kansas City Fed’s March 2025 approval of a limited-purpose payment account for Kraken Financial created the first precedent for restricted Fed access, though this model excludes interest on reserves and Fed credit facilities available to full master-account holders.
Industry Pressure Mounted Before Executive Order
The order reflects years of rejected applications and regulatory friction. Custodia Bank, a crypto-focused institution led by CEO Caitlin Long, applied for Federal Reserve System membership in 2023 and was denied. Ripple has applied for a Fed master account. Coinbase Chief Legal Officer Paul Grewal has publicly criticized “outdated rules on payment access and third-party risk management” that favor incumbent banks. Senator Cynthia Lummis, a vocal crypto advocate, has argued that “fintech firms had long been shut out while legacy institutions benefited from privileged access.” Galaxy Digital’s Alex Thorn framed the issue plainly: “the idea that only Fed-supervised, deposit-taking lenders should process wire transfers is a modern regulatory choice rather than a permanent rule of finance.” Other firms including Anchorage Digital, Paxos, BitGo, Wise, and Fidelity Digital Assets are pursuing banking charters as an alternative path to payment system access.
What Happens Next Remains Unclear
The executive order mandates a Fed review but sets no timeline or approval criteria. The Federal Reserve has not publicly responded to the directive. Key questions remain unresolved: whether regional Fed banks hold independent approval authority, how the limited-purpose account model will scale across applicants, and whether the banking industry will mount organized opposition. Kraken’s partial access suggests a tiered approach may emerge, but it is unclear whether that model satisfies stablecoin issuers’ settlement speed requirements or crypto exchanges’ operational needs.
