The U.S. Federal Reserve is seeking public comment on a proposal to create limited-purpose payment accounts for fintech companies and non-federally insured institutions. This initiative would grant these firms direct access to the Fed’s clearing and settlement infrastructure.
The proposal aims to increase payment speeds and reduce transaction costs. These accounts would not provide access to intraday credit or the discount window. Account holders would not earn interest on reserves held at a Reserve Bank.
The Fed opened a 60-day comment period for the proposal. Reserve Banks are encouraged to pause decisions on current access requests until the policy is finalized.
This move follows an executive order to explore expanded payment service access. Fed Governor Michael Barr opposes the current proposal, citing potential money laundering and terrorist financing risks from institutions not under direct Fed supervision.