CryptoSlate
President Donald Trump signed an executive order on May 19 directing the Federal Reserve to revisit how it grants payment-account access to non-bank financial companies, including crypto and blockchain firms. The directive, titled "Integrating Financial Technology Innovation into Regulatory Frameworks," orders federal agencies to identify rules and supervisory practices that may unnecessarily restrict financial innovation, and asks the Fed to determine whether existing law permits broader access for non-depository institutions and how the application process should work.
The order places Fed master accounts — the payment accounts that connect eligible institutions directly to Fedwire and other Federal Reserve services — at the center of the policy debate. It also asks the Fed to clarify whether the 12 regional Reserve banks can independently approve or deny applications, a question made urgent by the Kansas City Fed's March decision to grant a limited-purpose account to Payward, the parent of Kraken.
Why it matters
Kraken's limited-purpose account has become the template. It gives the exchange a restricted connection to Fed payment rails for institutional deposit and withdrawal flows, but excludes reserve interest, Fed credit access, and other insured-bank privileges. Caitlin Long of Custodia Bank, which has fought the Fed since its 2023 rejection, called the order a long-overdue correction; Coinbase CLO Paul Grewal said existing rules had been protectionist toward incumbents. Senator Cynthia Lummis framed the directive as a level-the-playing-field move for fintechs shut out of payment infrastructure that legacy banks use by default.
The names lining up are the clearest signal of where this is heading. Ripple has applied for a master account and supports a "skinny" account model that would support RLUSD reserve movement. Coinbase and Circle already operate under a federal trust-bank structure that USDC payments and broader stablecoin operations could sit on. Anchorage is federally chartered; Paxos, BitGo, and Fidelity Digital Assets have pursued national trust bank approvals from the OCC. None of these approvals guarantee master account access on their own, but together they put the firms in the queue for whatever framework the review produces.
Market impact
The banking industry is preparing to fight. ABA President Rob Nichols said any firm offering bank-like services should be held to identical safety, soundness, and consumer-protection standards, warning that the review must not weaken the existing system.
Frequently asked questions
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What did Trump's May 19 executive order on crypto and Fed access actually do?
The order directs the Federal Reserve to evaluate its framework for granting master-account and payment-service access to non-bank financial companies, including crypto and blockchain firms, and to clarify whether the 12 regional Reserve banks can independently approve applications.
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Does the order immediately give crypto firms access to Fed payment rails?
No. The directive does not grant access on its own. It mandates a Fed review of whether existing law permits broader access and how the application process should work, with the Kansas City Fed's March Payward/Kraken decision as the working precedent.
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Why is the Kraken approval important for other crypto firms?
The Kansas City Fed gave Payward, Kraken's parent, a limited-purpose payment account in March — a restricted connection to Fedwire for institutional deposits and withdrawals that excludes reserve interest and Fed credit access. It is now the template regulators can apply to Ripple, Coinbase, Circle, Anchorage, Paxos,…
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How would Fed master account access help Ripple, Coinbase, and Circle specifically?
Ripple has applied for a master account to support RLUSD stablecoin reserve movement and redemption. Coinbase and Circle already operate under a federal trust-bank structure that could deepen USDC payments integration with Federal Reserve plumbing, reducing reliance on bank intermediaries.
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Why are banks pushing back on broader Fed access for crypto firms?
The American Bankers Association argues that any firm offering bank-like payment services should meet identical capital, supervision, deposit-insurance, and consumer-protection standards as insured banks. Banks warn that direct access without equivalent safeguards creates settlement, liquidity, and money-laundering…
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