Anchorage Digital Bank has formally objected to a Federal Reserve proposal that would create a limited-purpose payment account, arguing it fails to function as a viable alternative to a traditional master account. In a comment letter submitted to the central bank this week, the OCC-chartered national trust bank outlined why the new structure falls short for institutions seeking direct access to US payment rails.
The bank supports the Federal Reserve’s broader effort to update how eligible institutions connect to its systems.
However, it maintains that the proposed payment account—restricted in key ways—cannot replace the master accounts that national banks have used for more than a century.
Anchorage itself applied for a full master account in August 2025, seeking to reduce reliance on intermediary banks for settlement and cash management.
Under the Fed’s framework, payment account holders would gain access to certain services such as Fedwire, FedNow, and the National Settlement Service, subject to automated safeguards.
Yet the design excludes FedACH, the automated clearing house network that processes the bulk of everyday electronic payments by volume.
Without this access, institutions would still depend on correspondent banks for routine payment and settlement activity, undercutting the efficiency gains that direct Fed connectivity is meant to deliver.
Further limitations compound the problem.
The proposal includes overnight balance caps that would force firms to move client funds to third-party banks at the close of business, reintroducing the very counterparty and operational risks the account is intended to minimize.
It also withholds intraday liquidity and provides no interest on balances held at the Federal Reserve.
Anchorage contends these restrictions leave payment account holders at a clear competitive disadvantage compared with traditional master account holders.
The bank also raised process concerns. The current approach could subject federally supervised national trust banks to the same heightened review tier as entities lacking a federal primary supervisor.
Anchorage argues that federal supervision—not deposit insurance status—should determine eligibility for the central bank’s payment infrastructure.Other commenters have expressed related views.
Some industry groups agree that missing FedACH access and the absence of interest make the accounts commercially impractical.
Banking associations, meanwhile, have generally endorsed the restrictions as necessary protections for system stability while calling for even tighter oversight of any non-traditional applicants.
The Federal Reserve advanced the payment account concept after an earlier request for information and a formal proposal issued in May 2026. Public comments closed near the end of July. Anchorage’s position highlights a preference among certain regulated digital-asset institutions for full master account privileges rather than a constrained substitute that preserves many existing frictions.