Fed Proposes New 'Payment Account' Category to Widen Access to Clearing Infrastructure

Fed Floats "Payment Account" Proposal, Reopening Access Debate

The Federal Reserve Board issued a formal proposal on 20 May 2026 inviting public comment on creating a new category of account — a "payment account" — that legally eligible financial institutions could use specifically for clearing and settling payments. The notice, published in the Federal Register as document 2026-10375 on 26 May 2026, also includes proposed revisions to both the Federal Reserve Policy on Payment System Risk and the existing Guidelines for Evaluating Account and Services Requests.

The move represents the most concrete regulatory step yet in a years-long debate over how — and whether — non-traditional financial institutions should gain direct access to the Federal Reserve's payment infrastructure.

What Is Being Proposed

The proposed "payment account" would be narrower in scope than a standard Federal Reserve master account, designed specifically for payment clearing and settlement rather than the full suite of services a master account provides. The ABA Banking Journal, whose reporting is cited as a secondary source in this coverage, characterised the structure as a "skinny master account" — a descriptor that captures the functional limitation but originates in industry commentary rather than official Federal Reserve language.

The Federal Reserve's May 2026 proposal would create a distinct account type for eligible institutions to use solely for clearing and settling payments — a more limited instrument than the traditional master account.

The proposal builds on a process that has been under development for some time. A December 2025 Federal Register notice (2025-23712) previously requested information and comment on a "Reserve Bank Payment Account Prototype." Editorial note: The primary source URL for document 2025-23712 was inaccessible at the time of research due to a CAPTCHA block, and its content could not be independently read; this reference is treated as single-source and unverified pending confirmation.

The 2022 Framework That Set the Stage

The May 2026 proposal revisits ground the Federal Reserve has been working since August 2022, when the Board published final guidelines establishing a transparent, risk-based, and consistent framework for Reserve Banks to use when reviewing requests for Federal Reserve accounts and payment services. Those guidelines were announced via a Federal Reserve press release dated 15 August 2022 and are recorded in the Federal Register as document 2022-17885, published in August 2022.

The Federal Reserve also maintains a public Master Accounts and Services Database, with associated FAQs explaining its scope and function — a resource that reflects the transparency commitments embedded in the 2022 framework.

Custodia's Defeat as Backdrop

No single case has illustrated the stakes of master-account access more starkly than that of Custodia Bank, which pursued a Federal Reserve master account through multiple court levels and ultimately lost. Multiple independent secondary sources — including reporting from Banking Dive, CoinDesk, CryptoNews and CoinTelegraph — corroborate the outcome. In regulatory terms, the Custodia litigation demonstrated that the existing master-account framework left significant discretion with Reserve Banks, a dynamic the 2022 guidelines attempted to address through clearer criteria but did not fully resolve.

Why It Matters

Analysts note that the proposed payment account structure could reconfigure the access debate by creating a functionally distinct pathway — one that neither replicates the full master-account relationship nor leaves non-traditional institutions entirely outside the Federal Reserve's settlement infrastructure. Whether that pathway satisfies fintech firms, digital-asset institutions and other non-bank applicants who have sought direct Fed access remains an open question subject to the comment process.

The public comment period was opened following the 26 May 2026 Federal Register publication of notice 2026-10375. Readers should consult the Federal Register directly at federalregister.gov or the Federal Reserve's website at federalreserve.gov for the official comment deadline and full text of the proposal.

Primary sources: Federal Reserve Board press release other20260520a.htm (20 May 2026); Federal Register document 2026-10375 (26 May 2026); Federal Reserve Board press release other20220815a.htm (15 August 2022); Federal Register document 2022-17885 (August 2022). Secondary sources: ABA Banking Journal; Banking Dive; CoinDesk; CryptoNews; CoinTelegraph.