US President Donald Trump signed a new executive order this week that is of critical importance for cryptocurrencies. In this order, Trump instructed the government and the Federal Reserve to review the access of cryptocurrency companies to payment systems.
The FED soon presented a proposal on the matter, taking a significant step. According to the proposal, the FED offered a limited scope suggestion for ‘payment accounts’.
Accordingly, the FED will allow certain firms, including cryptocurrency and fintech companies, to transfer money through the FED payment infrastructure.
According to the FED statement, the proposed account access will be a simplified version of the “master account service” the central bank offers to commercial banks. The new system will be a new and more limited payment account model that does not offer all the guarantees available to traditional banks. Its aim is to increase payment speeds and reduce costs.
The Fed statement indicated that these accounts would exclude benefits such as intraday credit facilities, access to discount windows, and interest payments on reserves held with the Fed.
While the new system won’t be recognized as a full master account, experts note that access to the Fed’s payment system has been a long-standing goal for the cryptocurrency industry.
The FED announced this proposal on its official website and is now awaiting feedback from the industry.
Ripple Makes Headlines!
As is known, companies in the cryptocurrency and fintech sectors have long been requesting direct access to the Fed’s main accounts. This access would allow firms to conduct transactions directly through the Fed’s payment systems, making money transfers faster and less costly.
At this point, Ripple (XRP) has become one of the most closely watched companies in connection with the main account debate. The company had previously applied to the FED for access as part of its efforts to integrate its payment network and RLUSD stablecoin into the traditional financial system.
Besides Ripple, the company wasn’t the only one investigating the matter. Coinbase, Circle, Anchorage Digital, and Custodia Bank are also reportedly applying for or researching access to the Federal Reserve’s payment system.
*This is not investment advice.
