Federal Reserve Governor Christopher Waller today provided an update on the feedback the Fed received about a proposal to create “skinny” accounts for payment services, acknowledging that banks and financial technology firms want conflicting things from the proposed service.
Waller has proposed that the Fed create a “payment account” category that certain financial institutions could use for the limited purpose of clearing and settling payments. During a Q&A at an economic policy forum hosted by the Global Interdependence Center, Waller said such “skinny” master accounts would be little more than checking accounts, as they would not pay interest or give account holders access to the discount window.
The Fed recently sought public feedback on the proposal. (Read ABA’s comments.) Waller said the crypto firms “want more stuff,” such as interest payments on the accounts. Banks have raised concerns about money laundering and other illicit activities, and whether account holders would be held to the same regulatory controls as depositary institutions.
“I don’t have any issue with what both sides are saying, but you’re seeing one pulling me this way and the other one pulling me that way,” he said. “So it’s finding the right kind of middle lane that I’m trying to get to with this.”
