Federal Reserve to roll out ‘skinny master accounts’ this year as broader crypto rules remain in limbo, Fed Gov. Waller says

Federal Reserve Governor Christopher Waller said the central bank plans to roll out its “skinny master account” proposal before the end of the year, while work on a broader cryptocurrency market structure bill stalls and markets falter. 

Speaking Monday at an event hosted by the Global Interdependence Center, Waller said he hopes to have the slimmed-down version of a Fed master account in place by year’s end. A traditional 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. The proposed “skinny” version would not allow for interest on balances and could not access the discount window to borrow funds, among other limits. 

Comments were due on Friday, revealing rifts between crypto industry participants and community banks over whether nontraditional finance firms should be allowed to connect to parts of the U.S. payment system. 

“We’ll have to kind of work through that stuff, but if we get that done reasonably well, I’d like to try to have this done by the end of the year, if possible,” Waller said.

The central bank’s work in digital assets forges on as lawmakers in Washington D.C. face several obstacles in trying to pass a bill to regulate the industry as a whole. 

Waller pointed to “euphoria” that stemmed from President Donald Trump entering office last year and said that is now going away as leading crypto assets, including bitcoin, retrace their prices to multi-month lows.

“You get in, you make some money, you might lose some money,” Waller said. “That’s the nature of the beast in a lot of these things. Some of the euphoria that came into the crypto world with the current administration, some of that’s kind of fading.”

Bitcoin hit its all-time high at just over $126,000 last year, but has since fallen to around $70,000, according to The Block’s price page. 

Progress stalled in DC

On Capitol Hill, lawmakers are working to pass broader crypto market structure legislation, often called “Clarity” after the House version of a bill that passed over the summer. Efforts in the Senate have stalled, however, igniting concern that clarity isn’t coming.

If passed, a market structure bill would regulate the crypto industry as a whole, including setting standards for decentralized finance operators and crypto exchanges while also divvying up roles for two key agencies — the Commodity Futures Trading Commission and the Securities and Exchange Commission. 

The Senate Agriculture Committee, which has jurisdiction over the CFTC, advanced its version of a market structure bill last month, but received no Democratic support over ethics concerns related to Trump’s crypto ties. The Senate Banking Committee, which oversees the SEC, pulled its hearing to vote on its draft at the 11th hour, after Coinbase withdrew support largely stemming from disagreements over how to treat stablecoin rewards.

“Clarity seems to be sort of stalled in the Congress,” Waller said on Monday. “There is a lot of opposition to what they want to do on things, and they can’t seem to break through to get it finished.”

“That’s part of the reason there’s some disruption in this crypto world,” he added. “Everything thought Clarity would come in and that would clear the road, and everybody could move on. It doesn’t look like it’s going anywhere anytime soon.”

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