The Federal Reserve Board on Wednesday requested public comment on a proposal to establish a ‘payment account’, a special-purpose Reserve Bank account that legally eligible financial institutions could use solely to clear and settle payments. Alongside the proposal, the Board encouraged Reserve Banks to temporarily pause access decisions for Tier 3 applicants until the policy development process is complete.
What the account is
The payment account is designed for institutions with payments-focused business models, including fintechs and crypto firms that are not federally insured. In the Board’s Account Access Guidelines framework, these fall under Tier 3, covering eligible institutions that are not federally insured and not subject to federal prudential supervision at the institution or holding-company level.
The Board said the proposal is “substantially similar” to the prototype outlined in its December 2025 request for information. It described the payment account as distinct from a master account, and said the proposal would not expand or change legal eligibility for access to Fed accounts and services.
Payment account holders would have no access to the discount window or intraday credit, would earn no interest on balances, and would only have access to payment services with automated overdraft prevention. Closing balance limits would apply, based on an institution’s expected payment activity. The Board said the maximum closing balance was increased from the December prototype after public comments. The earlier cap was set at the lesser of $500 million or 10% of total assets, according to the staff memo supporting that prototype.
Reserve Banks would also expect payment account holders to mitigate illicit finance risks and could impose additional restrictions on a case-by-case basis.
The Board said the temporary pause on Tier 3 decisions is intended to allow the Fed to solicit public input and promote consistent implementation across Reserve Banks.
The comment period will close 60 days after publication in the Federal Register.
