US House Panel Debates Direct Fed Payment Access for Crypto, Fintech Firms
Summary
- The House Financial Services Committee held a hearing on whether to allow crypto companies and fintech firms direct access to the Fed's payment system.
- The hearing centered on a proposal to let crypto banks and fintech firms use the Fed's payment system directly on a limited basis through skinny master accounts.
- President Donald Trump previously issued an executive order directing the Fed to review its policy on direct access to its payments network for crypto companies and other fintech firms.
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The House Financial Services Committee held a hearing on whether to allow cryptocurrency and fintech firms direct access to the Federal Reserve's payment system.
The Block reported on June 24 that a key issue at the hearing was whether crypto firms should be allowed into the Fed's payments network through a so-called skinny master account now under review by the central bank.
A skinny master account would allow crypto banks and fintech firms limited direct access to the Fed's payment system. Most companies currently use payment services through commercial banks.
Representative Dan Meuser, a Republican, said access to the Fed's payment system is closely tied to the safety of the financial system and requires careful consideration of who should be granted direct access to core payments infrastructure.
Rachel Anderika, global head of operations at Anchorage Digital, the first federally chartered crypto bank in the US, said the country needs a regulatory framework that enables innovation if it is to maintain its status as a global financial center.
Representative Stephen Lynch, a Democrat, cited cryptocurrency price volatility and the bankruptcy of fintech firm Synapse as he argued that crypto companies should meet minimum regulatory standards for consumer protection and soundness before gaining access to the Fed's payment system.
President Donald Trump in May issued an executive order directing the Fed to review its policy on direct access to its payments network for fintech firms, including crypto companies.
