The Federal Reserve Seeks Feedback on Proposal to Establish Limited "FedNow Accounts" for Certain Financial Institutions

BlockBeats News, December 19th, the Federal Reserve announced on Friday that it is seeking feedback on establishing limited "payment accounts" for certain financial institutions. These accounts would allow the institutions to use the Fed's payment services for clearing and settling transactions but would not have the broader access to facilities that banks currently enjoy. Federal Reserve Governor Waller stated that such accounts could "support innovation" while safeguarding the security of the payment system. If established, these accounts would be distinct from the Fed's master accounts, would not earn interest, and would not have access to the Fed's credit services. These accounts would also be subject to balance limits. Waller first proposed the idea of establishing such accounts in October of last year, as the Fed was seeking a balance to enable wider use of its payment services by fintech companies and other institutions without granting full master account access to less-regulated entities. (Jinse Finance)