Trump calls for Fed review of master account rules for crypto sector

U.S. President Donald Trump has directed the Federal Reserve to review whether fintech and crypto firms should receive direct access to the central bank’s payment infrastructure through a new executive order focused on financial technology policy.

Under the order signed Tuesday, titled “Integrating financial technology innovation into regulatory frameworks,” the Trump administration said federal agencies should remove regulations it considers unnecessarily restrictive for financial technology firms operating in digital assets and blockchain services.

Within the order, the White House specifically asked the Federal Reserve to conduct a comprehensive review of its policies governing access to Reserve Bank payment accounts and payment services. Officials were also instructed to examine whether existing rules could be expanded to accommodate non-bank fintech and crypto firms.

Federal Reserve banks currently have authority under the Federal Reserve Act to approve or reject access requests for payment services. In practice, those accounts are typically reserved for licensed depository institutions, a requirement that has pushed several crypto companies to pursue banking-style charters in recent years.

At the same time, the administration asked the Fed to clarify whether the 12 regional Federal Reserve banks can independently approve or deny access to payment accounts, commonly known as master accounts.

Such accounts would allow crypto firms to connect directly to payment systems like Fedwire without depending on intermediary banking partners for dollar settlement and transfers.

Kraken approval intensified industry debate

Pressure around the issue increased after the Kansas City Federal Reserve approved a limited-purpose master account for Payward, the parent company of crypto exchange Kraken, earlier this year.

The arrangement gave Kraken Financial, the company’s Wyoming-chartered banking arm, direct access to core U.S. payment rails used for high-value settlements. According to earlier statements from Kraken Co-CEO Arjun Sethi, the approval represented the “convergence of crypto infrastructure and sovereign financial rails.”

Even so, the account came with restrictions. Under the Federal Reserve’s limited-purpose structure, institutions can access payment systems but cannot earn interest on reserves or borrow from the Fed’s discount window.

Soon after the approval became public in March, several U.S. banking organizations criticized the decision. The Independent Community Bankers of America said it had “deep concerns” about allowing a crypto-focused institution to access the Fed’s infrastructure under a different regulatory framework than traditional banks.

Meanwhile, the Bank Policy Institute argued the Kansas City Fed approved what it described as a “skinny” master account before the Federal Reserve finalized a formal policy governing such arrangements.

Banking groups also raised concerns over Kraken Financial’s status as a Wyoming Special Purpose Depository Institution, or SPDI, since SPDIs are not federally insured like conventional banks. According to those industry groups, granting uninsured institutions direct settlement access could create compliance and financial stability risks.

Back in December, the Federal Reserve released a proposal outlining a framework for limited-purpose master accounts. The proposal described a restricted version of central bank access that would permit payment system connectivity while excluding features traditionally available to banks.

Support for expanding access has also emerged in Congress. Last month, California Representatives Sam Liccardo and Young Kim introduced the Payments Access and Consumer Efficiency Act, known as the PACE Act, which seeks to allow certain non-bank providers access to Federal Reserve payment services.

Although the bill remains in its early stages, crypto industry groups have publicly backed the proposal as part of a push to integrate digital asset firms more directly into the U.S. financial system.