Who gets a direct line to the Fed? Congress weighs risks of Fed 'skinny accounts' for crypto and fintech firms

As the Federal Reserve considers granting digital-asset and fintech firms limited access to the central bank through so-called "skinny" accounts, lawmakers debated how much access — and influence — those companies should have in the U.S. payments system.

On Wednesday, during a House Financial Services Committee hearing to discuss the changing role of banks and fintechs, particularly a new idea from the Federal Reserve that would allow certain crypto-focused banks to have direct access to the central bank.

That raises important questions about safety and soundness, said Rep. Dan Meuser, R-Penn.

"Access to the Federal Reserve payment system is not a small issue," Meuser said, adding, "Who should be allowed direct access to these critical payment rails?"

Fed Governor Christopher Waller first publicly floated the idea in October for a "skinny master account." That master account allows institutions direct access to the Fed's payment systems and provides the most direct access to the U.S. money supply available to financial institutions. Those without master accounts are often forced to rely on partner banks with master accounts to provide services.

Dozens of letters have since been filed on whether nontraditional financial firms should have that access. The crypto industry broadly supported the proposal, calling it "overdue," while community banks voiced concerns about safety measures and argued that novel financial institutions are "not subject to the same robust regulatory compliance regime."

Later in May, President Donald Trump issued an executive order directing the Federal Reserve to evaluate its policies on granting fintech firms, including crypto companies, direct access to the central bank's payment rails.

Separately, the Kansas City Fed approved a so-called "limited purpose account" for Payward, the parent company of crypto exchange Kraken, in March, which sparked debate over the extent to which crypto and fintech firms should be allowed to access Federal Reserve services directly.

During Wednesday's hearing, Anchorage Digital Head of Global Operations Rachel Anderika pressed for regulatory frameworks to bolster innovation. Anchorage Digital Bank is the first federally chartered crypto bank.

"One important lesson I have learned is this: If America is going to continue to be the financial capital of the world, we need regulatory frameworks – federal and state – that allow innovation," she said in her opening remarks.

Fluctuations

Other lawmakers voiced concerns about the volatility of digital assets. Both bitcoin and ether have dropped precipitously. Bitcoin fell as low as $59,000 on Wednesday, after reaching over $100,000 a year ago.

Rep. Stephen Lynch, top Democrat of the committee's digital assets-focused panel, pointed to those fluctuations.

"As the ranking member of the subcommittee on digital assets, we see huge daily fluctuations in the value of cryptocurrency, and I wonder how the financial system can respond to that in a safe way for the consumer," he said.

Lynch cited Synapse, which filed for bankruptcy in 2024 after customers lost millions of dollars of money held on fintech platforms. Synapse was a fintech company that connected fintech apps to banks. The Consumer Financial Protection Bureau alleged that it failed to maintain adequate records of customer funds.

"So given what happened with Synapse, what should Congress be requiring as a minimum condition or minimum conditions before any fintech or digital asset company gains access to those bank-like powers, especially at a reserve master account?" Lynch said.