Federal Reserve Governor Christopher Waller suggested creating a 'skinny' master account to give compliant crypto firms, including stablecoin issuers, limited direct access to Fed payment rails. The proposal, announced on October 21, 2025, at the Fed's Payments Innovation Conference, aims to reduce reliance on commercial banks while imposing strict limits. It revives narrow banking concepts amid growing stablecoin adoption following the GENIUS Act.
On October 21, 2025, Federal Reserve Governor Christopher Waller outlined a 'skinny' master account during opening remarks at the Fed's inaugural Payments Innovation Conference. This limited account would provide stablecoin issuers and other crypto firms with basic access to Fedwire and ACH payment systems, but exclude interest payments, daylight overdrafts, discount window borrowing, and full Federal Reserve services. To manage balance sheet impacts, the accounts would include balance caps and reject payments if balances reach zero.
The proposal addresses long-standing challenges for firms like Custodia Bank, Kraken, Ripple, and Anchorage Digital, which have sought full master accounts. Stablecoin issuers currently operate as de facto narrow banks, holding reserves to back tokens without lending, but must partner with commercial banks for Fed access, creating redemption bottlenecks during stress. Direct Fed reserves would make tokens claims on central bank liabilities, reducing credit risk and improving settlement efficiency from hours to near real-time.
Caitlin Long, CEO of Custodia Bank, called it a correction of the Fed's 'terrible mistake' in blocking payments-only banks from master accounts. Ripple CEO Brad Garlinghouse argued that firms meeting AML and KYC standards deserve banking-grade infrastructure access. Linda Jeng, CEO of Digital Self Labs, noted that stablecoin issuers already function as narrow banks but lack integration into the U.S. monetary system under the GENIUS Act, signed in July 2025.
However, Arthur Hayes, co-founder of BitMEX, warned of disintermediation: 'Imagine if Tether didn’t need to rely on a TradFi bank for its existence. The Fed is moving to destroy commercial banking in the US.' Former World Bank President David Malpass suggested it would help 'defend the dollar's purchasing power' amid global stablecoin competition. Waller described the idea as a prototype, directing staff to gather stakeholder feedback without a specified timeline.