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Federal Reserve Board member Chris Waller announced at the Federal Reserve Bank's Payments Innovation Conference that the central bank proposed the introduction of a new type of restricted master account (referred to as the "streamlined master account"), allowing all legally compliant institutions to directly access the Federal Reserve payment system without relying on correspondent banks. This streamlined master account does not provide all the services of a full master account, such as the ability to borrow from the Federal Reserve, but any legally compliant entity can apply, and the eligibility legal rules will not change.
This move will enable the Federal Reserve to give the green light to innovative banks, fintech companies, stablecoin issuers, and other payment companies. Eleanor Terrett stated that this is significant for companies like Custodia Bank and Kraken, which have been trying for years to obtain a Federal Reserve master account, with Custodia even taking the Federal Reserve to court. Additionally, companies like Ripple and Anchorage, which applied this year, may also see their access qualifications expedited as a result.
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