President Donald Trump has pushed the Federal Reserve to revisit one of the most contested gateways in US finance, escalating a fight over whether crypto and fintech firms should be allowed to connect directly to the central bank’s payment system.
On May 19, Trump signed an executive order directing the Fed to evaluate its policies on granting payment-account access to non-bank financial companies, including firms involved in digital assets, blockchain services, and other financial technology businesses.
The order, titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” asks federal agencies to identify rules and supervisory practices that may place unnecessary limits on financial innovation.
The directive does not immediately grant crypto firms access to the Fed’s payment rails. However, it gives the central bank a clear mandate to review whether existing law permits broader access and, if so, how the application process should work.
The outcome could determine whether companies such as Kraken, Ripple, Coinbase, Circle, Anchorage, Wise, Paxos, and BitGo can reduce their reliance on intermediary banks and move closer to the infrastructure that handles high-value dollar settlement.
Trump order turns master accounts into a White House priority
At the center of the order is the Fed master account, a payment account that allows eligible institutions to access Federal Reserve payment services directly.
Those services include Fedwire, the high-value payment system used by banks and financial institutions to move dollars across the US financial system.
Under current Fed rules, access is generally limited to depository institutions. That has led some crypto firms to seek special-purpose bank or national trust bank charters to qualify for direct access.
Trump’s order asks the Fed to conduct a comprehensive review of its framework for granting access to Reserve Bank payment accounts and payment services. It also directs the central bank to clarify whether the 12 regional Federal Reserve banks have the legal authority to independently approve or deny applications.
That question has become more urgent after the Kansas City Fed approved a limited-purpose payment account for Payward, Kraken’s parent company, in March.
The approval gave the crypto exchange’s banking unit a restricted connection to the Fed’s payment system, creating a precedent for other digital asset companies seeking similar access.
The order also directs regulators to examine broader barriers facing fintech firms, including licensing practices, third-party risk-management guidance, and policies that may limit partnerships between banks and technology companies.
Sen. Cynthia Lummis framed the directive as a correction to years of restricted access for financial technology companies.
She said fintech firms had long been shut out while legacy institutions benefited from privileged access, adding that the administration’s order was aimed at creating a more level playing field, stronger competition and lower payment costs for consumers.
Coinbase Chief Legal Officer Paul Grewal also supported the move, saying the White House had acknowledged that outdated rules on payment access and third-party risk management favored incumbents over innovators. He described the existing framework as protectionist and said regulators should update it.
Those comments capture the crypto industry’s argument that access to payments has become a competitive bottleneck. Firms that cannot connect directly to Fed payment systems must route activity through banks, which can increase costs, slow settlement, and expose companies to bank-specific risk.
Kraken gives crypto firms a working model
Kraken’s approval gives the industry a practical example of how expanded access could work.
In March, the Kansas City Fed granted Kraken Financial a limited-purpose account that allows access to core payment rails used for high-value dollar settlement.
The account could help the exchange process institutional deposits and withdrawals more efficiently, particularly for clients moving large balances between trading venues, custodians, and banking partners.
The arrangement is limited. Kraken does not have access to all services available to insured banks, and the account reportedly excludes benefits such as interest on reserves and access to Fed credit.
Those limits are designed to reduce risk to the central bank while giving a crypto firm a narrower connection to payment infrastructure.
That model could become the template for other digital asset companies. A restricted account would allow firms to move dollars through Fed payment systems while withholding privileges that regulators and banks consider more sensitive, including overdrafts, reserve interest, or emergency lending access.
Caitlin Long, CEO of Custodia Bank, welcomed Trump’s intervention, saying the order recognized a continuing problem at the Fed with blocking legally eligible institutions from the US payment system. Custodia has spent years fighting for access after the Fed denied its application to join the Federal Reserve System in 2023.
The Custodia decision remains a warning for the sector. The Fed concluded at the time that the bank’s business model and crypto focus were inconsistent with the statutory requirements.
The rejection showed how difficult it could be for firms with digital asset exposure to obtain full access even when they pursue regulated charters.
Kraken’s limited approval changed the tone of that debate. Rather than full access or full rejection, regulators now have a narrower account structure they can use to bring crypto firms closer to the payment system while imposing safeguards.
Ripple, Coinbase, and Circle are positioned for the next phase
Ripple, Coinbase, and Circle are among the companies with the clearest business reasons to benefit from a broader Fed access framework.
Ripple has applied for a Fed master account and supports the idea of a restricted or “skinny” account that would give non-bank financial companies access to payment services without extending all central bank privileges.
Such access could support Ripple’s RLUSD stablecoin business by allowing faster reserve movement and redemption activity.
For stablecoin issuers, speed and certainty around reserve settlement are central to market confidence. A direct or limited Fed account could reduce reliance on bank intermediaries and make it easier to manage dollar liquidity during periods of heavy redemptions or market stress.
Coinbase and Circle have a similar interest through USDC and its broader payments infrastructure.
The companies have a federal trust-bank structure that could deepen their integration with regulated financial plumbing.
If finalized, that kind of charter could place stablecoin operations under clearer federal oversight while positioning the firms for direct or restricted access to payments.
Meanwhile, other firms are also in the queue. Anchorage Digital already operates as a federally chartered crypto bank. Paxos, BitGo, and Fidelity Digital Assets have sought or received approvals tied to national trust bank structures from the Office of the Comptroller of the Currency (OCC)
Those approvals do not automatically grant access to Fed payment accounts, but they move the firms closer to the kind of regulated status that could support an application.
The business case is straightforward. Crypto exchanges want faster fiat settlement. Stablecoin issuers want more direct reserve operations. Custodians want more efficient asset movement for institutional clients. Payment companies want lower dependence on correspondent banks.
Alex Thorn, head of research at Galaxy Digital, argued that the idea that only Fed-supervised, deposit-taking lenders should process wire transfers is a modern regulatory choice rather than a permanent rule of finance. He said banks are trying to preserve a payments monopoly as competition emerges from several directions.
That view reflects a growing industry argument that payment access should be based on function, supervision, and risk controls rather than the traditional bank model alone.
Banks warn access should come with bank-grade standards
However, the banking industry is preparing to challenge that argument.
On May 19, the American Bankers Association (ABA) said any company offering bank-like services should be required to meet the same rigorous regulatory and consumer-protection standards as banks.
ABA President and CEO Rob Nichols urged regulators to conduct the review in a way that allows innovation without compromising the safety and soundness of the financial system. He said:
“Unless everyone is held to the same high standards, the financial system and consumers will be at risk. In light of today’s White House Executive order on financial innovation, we urge the banking regulators to conduct their requested review in a way that allows for innovation but doesn’t compromise the safe and sound financial system we have today.”
That position goes to the core of the banking sector’s objection. Banks argue that direct access to Fed payment systems is a privilege tied to intense supervision, deposit insurance, capital requirements, liquidity rules, and examination standards.
They contend that firms with narrower charters or limited-purpose licenses could create risk if they gain access without equivalent obligations.
The risks are not theoretical for regulators. Fedwire is a central component of US dollar settlement. A cyberattack, operational failure, compliance breakdown, or liquidity problem at a firm with direct access could create settlement disruptions with consequences beyond that company’s own customers.
Money-laundering controls are another concern. Banks spend heavily on compliance systems, customer monitoring, and suspicious-activity reporting.
If crypto firms gain direct access, regulators will need confidence that those companies can meet equivalent expectations while operating across trading, custody, stablecoin, and payment markets.
Liquidity is also part of the debate. Banks have warned that broader access could pull funds away from the traditional banking system, especially if stablecoin issuers and fintech companies can hold balances or move funds more efficiently through the Fed.
Restricted accounts that do not pay interest or offer credit could reduce that concern, but banks are unlikely to accept the shift without a fight.
The Fed has signaled that limited-purpose accounts could mitigate some of these risks by denying access to reserve interest, Fed credit, and other privileges.
However, the structure still raises a policy question: how much access can regulators grant before a non-bank starts to look like a bank for payment purposes?
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