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US Fed Opens Pathway for Crypto Banks to Tap Central Banking System

CoinDesk logo CoinDesk 8/15/2022 Nikhilesh De
Fed Vice Chair Lael Brainard (Drew Angerer/Getty Images) © Drew Angerer Fed Vice Chair Lael Brainard (Drew Angerer/Getty Images)

The Federal Reserve announced it was publishing its final guidance for novel financial institutions to access its "master accounts," something these firms need to participate in the global payment system.

Monday's announcement would seemingly move the U.S. central bank one step closer to possibly allowing Wyoming trust companies, like Custodia and Kraken Bank, access to these accounts. The Fed first proposed guidance last year, opening up a request-for-comment process. Nearly 300 respondents filed comments, leading to a second public feedback process earlier this year.

In a statement, Fed Vice Chair Lael Brainard said, "the new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system."

The guidance is largely similar to what was first proposed in 2021, and will create a multi-tiered system allowing the Fed to adapt its evaluation process for granting access depending on what kind of financial institution is applying.

The third tier applies to firms that are "not federally insured and not subject to prudential supervision by a federal banking agency," which would most likely apply to the Wyoming crypto banks.

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