The Federal Reserve has finalized new guidelines that open access to “master accounts” of new types of financial companies, benefiting crypto and fintech sector.
Federal Reserve opens access to “master accounts” to benefit crypto sector
The Federal Reserve Board (FDB) announced that it has finalized new guidelines for Reserve Banks to offer “master accounts” to new financial institutions. Master accounts are a key link in the US (and international) financial chain;
In essence, as institutions offering new types of financial products, or with new statutes that include crypto and fintech (such as cryptocurrency custody banks) have grown in recent years, the Federal Reserve has decided to create a standardization of the application process for Reserve Banks.
And in fact, the guidelines will be used by the Reserve Banks themselves to evaluate applications with a transparent and consistent set of factors.
In this regard, Fed Vice Chairman Lael Brainard said:
“The new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system”.
These final guidelines are largely similar to those proposed by the Council in its May 2021 proposal and March 2022 supplemental proposal.
Federal Reserve expands account access to institutions with new fintech business models
The proposal, which was voted for by all seven members of the Federal Reserve Board, would extend access to Fed accounts and services to all those institutions with new fintech-related business models.
This is thus a stance by the Fed that could be somewhat beneficial to the crypto sector.
After all, in October 2021, the Chairman of the Federal Reserve himself, Jerome Powell, had stated that he had no intention of banning cryptocurrencies in the US, contrary to what had happened in China.
However, this does not preclude the fact that the Federal Reserve itself is looking for ways to be able to regulate the crypto market.