The Federal Reserve Board announced on Friday that it is seeking public feedback on a proposed “payment account” designed for eligible financial institutions. This new type of account would be used exclusively for the clearing and settlement of payments.
The initiative comes in response to recent changes in the payments sector, where advances in technology have prompted some financial institutions with innovative business models to request access to Federal Reserve payment services. The proposed payment account is intended to accommodate these needs by offering a limited set of features tailored specifically for payment and settlement purposes.
According to the Board, this approach may help reduce risks within the payment system. As a result, applications for these accounts could be processed more efficiently.
Governor Christopher J. Waller commented, “These new payment accounts would support innovation while keeping the payments system safe. This request for information is a key first step to ensuring that the Fed is responsive to evolutions in how payments are made.”
Unlike existing master accounts, which provide broader access to Federal Reserve services, the proposed payment accounts would not pay interest or allow access to Federal Reserve credit. They would also be subject to balance limits and other restrictions, distinguishing them from master accounts currently used by financial institutions.
The introduction of this type of account will not alter legal eligibility requirements for accessing Federal Reserve payment services.
The comment period on the proposal will end 45 days after its publication in the Federal Register.
