Fed faces test on crypto access
On Tuesday, U.S. President Donald Trump signed a wide-reaching executive order instructing federal agencies and the Federal Reserve to examine whether crypto and fintech firms should be allowed direct
The move comes as friction between crypto firms and traditional banks has intensified, with several digital asset companies—such as Kraken, Ripple, Coinbase, and Circle—seeking more streamlined entry to the U.S. financial system. In March 2024, the Federal Reserve Bank of Kansas City granted Kraken’s Wyoming Special Purpose Depository Institution a limited-purpose payment account, marking a precedent that may affect future decisions.
The Federal Reserve Board and 12 regional banks are now required to report on their payment account policies within 120 days of the order.
Regulators eye rules blocking fintech partnerships
The executive order gives U.S. financial regulators a tight 90-day window to review existing regulations, guidance, and application processes that may hinder partnerships between fintech or crypto firms and federally regulated institutions. Over the next three months, agency heads must identify any rules or supervisory practices that unnecessarily limit innovation or create barriers to entry for new market participants. Within six months after this initial review period, regulators are expected to propose concrete actions to encourage technological integration in traditional finance.
It’s unclear how quickly these reviews will translate into regulatory change.
The order also directs agencies to consider amending regulations that currently complicate applications for bank charters, credit union licenses, deposit insurance, and other federal approvals—a process many crypto firms have found burdensome or opaque. According to cryptoslate.com, companies like Anchorage, Wise, Paxos, and BitGo are among those potentially impacted by these changes.
Master accounts: who gets the keys?
is access to master accounts—special accounts at the Federal Reserve that let eligible institutions clear payments directly through systems like Fedwire. Currently, most crypto firms are shut out unless they obtain specialized bank charters or trust licenses. The executive order specifically asks the Board of Governors to assess its legal authority over granting such access to non-bank entities and uninsured depositories. The 12 regional Federal Reserve banks are also asked whether they can act independently in granting payment accounts or if board approval is always required.
On paper, this review could open doors for digital asset companies; in practice, it stops short of forcing any immediate policy shift. The order preserves the Fed’s independence by requesting an evaluation rather than mandating direct action. In December 2023, the Fed floated a proposal for “skinny” master accounts—limited versions designed for select fintechs—but implementation remains uncertain.
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Trump pushes for faster fintech integration
The executive order sets concrete deadlines: regulators must deliver their initial report on legal and policy frameworks within 120 days. By late September 2024, agencies are expected to outline steps for updating regulatory frameworks so digital assets can be integrated into mainstream payment rails. This timeline reflects mounting pressure from both industry players and lawmakers who argue that outdated rules primarily benefit incumbent financial institutions while stifling competition from innovative startups.
Ari Redbord of TRM Labs called Trump’s directive a “concrete step” toward broader digital asset adoption in the U.S., noting that stablecoins alone are projected to reach $33 trillion in transaction volume by 2025 with a market capitalization exceeding $300 billion. both the scale of potential demand and why access to core banking infrastructure has become such a high-stakes issue for crypto firms.
Uninsured banks in the spotlight
The spotlight now falls on uninsured depository institutions—entities that hold customer funds but lack federal deposit insurance—and how they might fit into this evolving landscape. The executive order singles out these firms alongside non-bank financial players as candidates for expanded access to Fed payment services. In January 2024, a Cato Institute study highlighted that most cases of debanking in America stemmed from government pressure rather than voluntary bank policies—a point likely to fuel debate as regulators weigh risk management against innovation incentives.
While some see this as an overdue modernization effort, others warn it could introduce new risks into critical payment infrastructure if not carefully managed.
Key indicators to follow
If the Federal Reserve Board submits its required report to President Trump within 120 days of the May 19 executive order, any immediate changes to fintech and crypto firms’ access to payment accounts will depend on whether the review finds current regulations permit broader access; however, it remains unclear if the Fed will recommend granting direct master account access to firms like Kraken, Ripple, Coinbase, or Circle at that time.
