Federal Reserve proposes limited master accounts — a long-sought win for crypto firms!

The U.S. Federal Reserve has issued a revised proposal for limited payment accounts that would give crypto firms and other non-bank financial institutions a lighter version of the master-account access the central bank provides to its fully-chartered member banks. The new accounts — dubbed "skinny" accounts in earlier discussions — would allow firms to clear and settle payments faster and at lower cost, without full master-account status.

Under the proposal, account holders would have no access to intraday credit, the discount window, or interest on balances, and automated overdraft controls would apply. The Fed has opened a 60-day comment period on the updated framework, which expands on a December request for information. One notable update: maximum closing balance limits were raised based on expected payment activity, a direct response to industry feedback.

Kraken became the first…