Fed proposes limited payment accounts for fintechs
The Federal Reserve proposed limited payment accounts to allow fintechs access to its payment rails. These accounts exclude interest on reserves to manage risk.
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The Federal Reserve proposed creating limited payment accounts for fintech firms to access its payment rails without traditional bank backstops on May 20. The proposal follows earlier Federal Reserve research into expanding infrastructure access while managing systemic risk. This framework allows non-banks to move money faster but denies them the liquidity cushions and interest earnings of commercial banks.
