Key Takeaways

Why is the Fed open to crypto?

According to Gov. Waller, it would reflect the changes that have happened in the sector, including stablecoins. 

What’s the broader benefit of the update to the sector?

Crypto leaders believe it would offer more legitimacy and boost stablecoins and the overall tokenized market. 

Alt HDs

Federal Reserve considers limited access to payment rails for stablecoin firms

Waller says Fed ready to integrate stablecoins into U.S. payment system

The U.S Federal Reserve appears ready to embrace crypto disruption, especially stablecoins. During the first-ever payment innovation conference by the regulator, Fed Governor Christopher Waller instructed the staff to accommodate stablecoin players into the U.S payment rails. 

Waller suggested a limited “skinny master account” that would allow stablecoin issuers and other innovative firms access Fed’s payment rails while mitigating risks. It would also eliminate the need for partner banks. 

Waller added that the sector has gone mainstream and the regulator will embrace it for payment innovations. 

“This is an acknowledgement that distributed ledgers and crypto-assets are no longer on the fringes but increasingly are woven into the fabric of the payment and financial systems.”

Crypto leaders welcome the move

The so-called “master accounts” are like a direct bank account at the Federal Reserve. If fintech and crypto firms get one, then they could hold reserves directly and settle transactions instantly with the Fed. It would also cut overall costs, which increase if they are forced to go through a middleman. 

Some of the beneficiaries of Waller’s proposal would be Ripple, especially since it applied for a Fed master account and banking charter this year. 

The conference was attended by top crypto and tech leaders,

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Author: Benjamin Njiri