Federal Reserve Moves Forward With “Skinny” Master Account Plan

The Federal Reserve is preparing to operationalize a narrower form of central bank access aimed at integrating new financial institutions without waiting for stalled legislation.

On February 9, 2026, Federal Reserve Governor Christopher Waller confirmed that the central bank intends to roll out its so-called “skinny master account” framework before the end of the year.

The proposal is designed to give eligible institutions, particularly crypto-native banks and fintech firms with national trust charters, direct access to the Federal Reserve’s payment rails. This administrative path comes as broader efforts, such as the GENIUS Act, remain delayed in Congress.

What the “Skinny” Account Allows and Restricts

Formally referred to as Payment Accounts, these master accounts are intentionally limited in scope. They are built strictly for clearing and settlement purposes rather than functioning as full-service banking relationships with the central bank.

Institutions approved for these accounts would be barred from earning interest on balances, accessing the Federal Reserve’s discount window, or using daylight overdraft facilities. In addition, the Fed is considering strict caps on overnight balances, potentially limiting holdings to the lower of $500 million or 10% of an institution’s total assets.

Eligibility remains tightly defined. Only institutions classified as “eligible depository institutions” may apply, a requirement that has pushed several stablecoin issuers—including Circle and Paxos, to pursue national bank or trust charters in order to qualify.

An Administrative Response to Regulatory Gridlock

Governor Waller framed the initiative as a pragmatic response to legislative inertia. Work on a comprehensive crypto market structure bill has slowed, leaving regulators with limited tools to address the growing presence of digital asset firms in the payments ecosystem.

The skinny master account proposal allows the Federal Reserve to integrate financial innovators into the existing payment system without expanding their access to monetary policy tools or liquidity facilities. In effect, it creates a middle ground between full exclusion and full banking privileges.

Industry Reactions Remain Divided

Reaction across the financial sector has been mixed. Crypto-focused banks such as Anchorage Digital and stablecoin issuers have largely welcomed the proposal, viewing it as a way to reduce dependence on intermediary partner banks and lower counterparty risk in payment flows.

Traditional banking groups have taken a more cautious stance. Organizations such as the American Bankers Associationhave warned that granting direct Fed access to institutions without long-standing federal supervisory histories could introduce new systemic risks, even with the proposed limitations in place.

Next Steps

The Federal Reserve closed its public comment period on February 6, 2026, receiving approximately 44 submissions from industry participants and stakeholders. With that feedback now under review, the central bank appears positioned to finalize and implement the framework later this year.

If adopted, the skinny master account would mark a significant shift in how the Federal Reserve manages access to its payment infrastructure, offering a controlled on-ramp for crypto-adjacent institutions while maintaining strict limits on their interaction with core monetary functions.

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