As widely reported, the Federal Reserve Governor Christopher Waller proposed “skinny” master accounts for payments-focused institutions, including crypto banks, during a Washington conference on October 21, 2025. This stripped-down access to the Fed’s payment rails—excluding perks like interest on balances or overdrafts—marks a decisive shift from years of regulatory stonewalling and so-called regulation by enforcement under the Biden Administration. For Custodia Bank, a Wyoming-chartered crypto bank, it’s validation after a painful five-year battle.
“Custodia welcomes the Fed’s acknowledgment of the importance of payment-only banks,” Caitlin Long, founder and chief executive officer of Custodia Bank, said in a statement on Tuesday. “We knew all along that a big but quiet faction at the Fed supported us, and it’s terrific to…
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) October 22, 2025
Caitlin Long, Custodia’s founder and CEO, hailed the move in a statement:
“Custodia welcomes the Fed’s acknowledgment of the importance of payment-only banks. We knew all along that a big but quiet faction at the Fed supported us, and it’s terrific to see Governor Waller publicly acknowledge this.”
Her words echo a broader sentiment in the crypto community, where Long’s X post—thanking Waller for correcting “the terrible mistake” of prior denials—garnered widespread support.
This isn’t mere rhetoric; it’s actually a direct rebuke to the Fed’s 2020-2023 era of “Operation Chokepoint 2.0,” an informal campaign that pressured traditional banks to avoid working with crypto firms, leading to collapses like Silvergate and Signature.
The significance reverberates across finance. Custodia’s 2020 application for a full master account was rejected twice, with the Fed citing unproven risks to stability—despite the bank’s focus on custody and payments, not lending.
Waller’s “skinny” model, with balance caps and streamlined approvals, addresses this by enabling direct Fed connectivity for “legally eligible entities.” It empowers stablecoin issuers like Tether or Circle to settle transactions via Fedwire without intermediaries, slashing costs and delays in cross-border flows.
For fintechs and DeFi platforms, it means faster integration into the U.S. dollar’s backbone, potentially unlocking trillions in more efficient, blockchain-backed payments.
Economically, this fosters innovation without all of the recklessness. Waller emphasized supporting “those actively transforming the payment system,” signaling the Fed’s maturation view of crypto: no longer fringe, but “woven into the fabric” of finance.
It could spur ETF expansions, as seen in Crypto.com‘s recent OCC trust charter filing, and aid firms like Kraken, Ripple, and Anchorage Digital in bypassing correspondent bank chokepoints.
Yet, certain caveats persist—eligibility hinges on more stringent AML/KYC compliance, and full accounts remain elusive for now, prompting Long’s cautious optimism. Critics like BitMEX co-founder Arthur Hayes warn of fallout for legacy banks, as direct access erodes their intermediary fees.
Still, for an industry deprived of vital infrastructure services, Waller’s nod is a watershed moment of sorts for the nascent industry. It affirms that persistent advocacy—from Custodia‘s lawsuits to Wyoming’s more crypto-friendly laws—can reshape policy in the long-term. As digital assets appear to be on track to claim a $10 trillion market by 2030, this quiet faction’s emergence potenially heralds a more inclusive, resilient financial ecosystem.