The United States Federal Reserve is disseminating the final instructions necessary for new financial institutions to access the “master accounts” necessary to participate in the global payment system.
Monday’s announcement may move the Fed closer to granting Wyoming SPDIs such as Custodia (formerly Avanti) and Kraken Bank access to these accounts, freeing them from the obligation to work through banks. intermediaries. The Federal Reserve started a procedure to request comments the previous year. A second public comment session was held this year as a direct result of the nearly 300 people who made comments.
Federal Reserve Vice President Lael Brainard stated that the new guidelines promote a safe, inclusive and creative environment for the payments system.
The guidelines are very similar to those initially proposed in 2021 and would create a multi-tiered system that would allow the Fed to change its access assessment procedure based on the type of financial institution requesting it. At each successive stage, an increasingly stringent review would be required.
Tier 1 financial institutions would be insured by the federal government. Tier 2 banks are not insured by the federal government but are subject to supervision.
Third-tier businesses, such as Wyoming crypto banks, “are not federally insured and are also not subject to prudential regulation by a federal banking institution,” according to the Federal Deposit Insurance Corporation (FDIC).
According to a statement, the Fed requested a comment after publishing its initial suggested guidance in 2021 and its revised recommendation earlier this year. The Fed received answers to these questions. Although many people commented by submitting form letters, the Fed only got fewer than 70 individual comments.
“According to many participants, the proposed Guidelines will make it more difficult for entities to access accounts and services if they have their own exclusive statutes. According to the text, several commentators advocated the idea that non-Fed-insured banks should be subject to the same rules as Fed-insured depository institutions, regardless of the type of business they conduct.
Long way
Custody and Kraken submitted their applications to access the main account in 2021, that is, before the Fed proposal.
David Kinitsky, CEO of Kraken Bank, told CoinDesk that the proposal was an encouraging start.
They are not new considerations. As he said, the Federal Reserve is investigating possible threats to the reserve, the payment system and the economy.
Routing numbers were issued to both organizations this year, which is a necessary step in establishing master accounts (although it’s not an indication that the companies will safely receive access).
In June, Custodia filed a lawsuit against the Federal Reserve for allegedly missing a one-year deadline to decide whether or not to grant access.
