As widely reported by now, US President Donald Trump has requested the Federal Reserve to seriously consider enabling proper fintech access to payment accounts As CI reported, Trump has now signed an executive order on Tuesday calling on US regulatory authorities as well as the Fed to carefully review applicable rules that could potentially be stifling financial innovation, including whether the reserve bank might further expand fintech access to its payment conduits, the systems that moves money between banks.
Fintech veteran Sam Boboev has pointed out via social media that the order now requests the Fed to formally join other federal regulators in thoroughly reviewing relevant policies that might be updated in order to support sustainable fintech growth.
Sam Boboev also shared that it now calls on the Fed to carefully examine its overall approach to enabling access to payment accounts as well as related services, and to consider options for further expanding this kind of access to fintechs and other non-bank entities.
Boboev further explained that access to these so-called “master accounts” by non-traditional financial companies has drawn a lot of attention at the Fed, as several fintech companies have applied or now intend to seek access.
As explained by the Fintech focused professional, the Fed master accounts are likened to bank accounts for banks, enabling their holders to easily move funds directly via the Fed’s payment channel.
Notably, investment platform Kraken had been granted a Fed master account in March of this year, providing it access to the reserve bank‘s wholesale payments system, Fedwire, and the option to hold limited balances on an overnight basis.
Boboev added that digital assets companies Ripple Labs, Anchorage Digital and UK fintech Wise also aim to win master accounts, according to public information.
They further explained that the Fed has previously signaled that it will open its payment channels to more crypto and fintech focused firms. In December of last year, it sought feedback on a potential new kind of payment account with restrictions somewhat similar to those that had been imposed on Kraken‘s application.
At this point, it is only a matter of time (not if but when) that these applications get greenlighted. Under the progressive Trump Administration, there has been a sharp focus on fintech innovations and making sure the business environment remains conducive to growth.