Federal Reserve ‘skinny master account’ proposal draws comments and clashes from crypto, community banks

The Federal Reserve received nearly 30 comment letters regarding its proposal for a "skinny master account," which would grant certain eligible institutions limited access to the central bank's payment services without interest on balances or access to the discount window. Crypto firms, like Anchorage Digital Bank, generally support the initiative but argue against limitations, such as the proposed overnight balance cap of $500 million or 10% of total assets, claiming it reintroduces risks the account aims to eliminate. Conversely, community banking groups, such as the Colorado Bankers Association and the Community Bankers Association of Illinois, expressed concerns over safety, arguing that novel financial institutions lack the robust regulatory oversight and track record of traditional banks, potentially posing risks to consumers and the financial system if granted access.

(Source：The Block)