Lawmakers in the House Financial Services Committee pressed the Federal Reserve over its proposal to grant limited access to its payment systems to fintech and digital-asset firms through so-called “skinny accounts,” highlighting concerns about systemic risk and oversight of nontraditional institutions.
Fed “skinny accounts” proposal draws scrutiny
The concept, introduced by Fed Governor Christopher Waller last October, would allow qualified firms to open simplified master accounts and connect directly to the central bank’s payment rails, bypassing traditional banking intermediaries. Lawmakers said such access could reshape how money moves through the U.S. financial system.
Rep. Dan Meuser warned that determining which firms qualify for direct access will be critical to preserving the integrity of the system, emphasizing that the decision carries long-term implications for financial stability.
Debate over risk and regulatory parity
The proposal has divided industry participants. Digital-asset firms and fintech companies argue that broader access would reduce costs and increase competition in payments, while community banking groups caution that newer entrants may not meet the same compliance and capital standards as traditional institutions.
Paige Pidano Paridon of the Bank Policy Institute told lawmakers that connecting less-regulated entities to core financial infrastructure could introduce new vulnerabilities. The Fed’s approach attempts to balance access and control by limiting privileges; firms with skinny accounts would not receive benefits such as interest on reserves or access to the discount window.
Precedent set by kraken-related approval
In March, the Kansas City Federal Reserve approved a limited-purpose account for Payward, the parent company of crypto platform Kraken. The move marked a significant test case and intensified debate over how deeply crypto and fintech firms should integrate with central bank systems.
President Donald Trump’s executive order in May further accelerated the issue by directing the Fed to review its framework for granting payment system access and assess whether current oversight tools can manage operational and liquidity risks tied to technology-driven firms.
Lawmakers raise concerns over volatility and failures
Rep. Stephen Lynch, who leads the panel on digital assets, pointed to ongoing volatility in cryptocurrency markets as a risk factor. Bitcoin recently traded near $59,000, sharply below prior highs above $100,000, while Ethereum hovered around $1,575.
He also referenced the 2024 collapse of fintech intermediary Synapse, which regulators said mishandled customer funds and records, asking what safeguards should be required before granting bank-like access to Fed systems.
Market context adds urgency
The policy debate is unfolding against a backdrop of sustained weakness in digital-asset markets. Bitcoin has declined significantly from its 2025 peak above $126,000 and remains under pressure in 2026, while Ethereum has posted steeper year-to-date losses and continues to signal bearish momentum in technical indicators.
At the same time, global crypto exchange-traded products have seen total assets fall about 15% this year to roughly $140 billion. Despite that decline, holdings of Bitcoin within these products remain near record levels, suggesting some traders are maintaining exposure through the downturn.
Next steps in regulation
The committee is expected to continue evaluating risk management standards and eligibility requirements for skinny accounts in upcoming hearings. Parallel legislative efforts, including the Digital Asset Market Clarity Act, are also advancing in Congress and could help define regulatory boundaries for the sector.
How policymakers resolve these questions will shape whether fintech and crypto firms gain direct access to the Federal Reserve’s infrastructure—and how much risk the broader financial system is asked to absorb in return.
To understand how traditional finance and DeFi intersect, explore what is TradFi and how does it work in today’s evolving regulatory landscape.
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