Fed's Stablecoin Access Plan Sparks Bank Disruption Debate

The Federal Reserve has taken a significant step toward integrating stablecoin issuers into the U.S. payment system by proposing a "skinny" master account that would grant limited access to Fed payment rails. The initiative, announced by Governor Christopher Waller at the central bank's inaugural Payments Innovation Conference, marks a shift from the Fed's historically cautious stance on digital assets. The account would allow stablecoin firms to process payments directly through the Fed's infrastructure without full banking privileges, such as interest-bearing balances or overdraft facilities, according to CryptoSlate.

The proposal, which includes balance caps and restricts access to emergency lending, aims to reduce friction in stablecoin redemptions while mitigating risks to the Fed's balance sheet. By enabling direct settlement, the Fed seeks to enhance the efficiency of dollar-backed stablecoin transactions, particularly during periods of high demand. For instance, firms like Ripple and Custodia Bank could leverage the framework to streamline cross-border payments and avoid reliance on correspondent banks, as CryptoSlate noted.

This move aligns with the broader regulatory landscape shaped by the Guiding and Establishing Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law in July 2025. The legislation mandates that stablecoins be fully backed by U.S. dollars or liquid assets and requires annual audits for large issuers. While the law established a foundational framework, it did not grant direct access to Fed infrastructure—a gap now being addressed by Waller's proposal, as Lookonchain reported and in an Invezz report.

The impact of these developments is already evident in the market. Blockchain data provider Artemis reported a 70% surge in stablecoin payments since the GENIUS Act's passage, with $10 billion transacted in August alone—up from $6 billion in February 2025. Business-to-business transactions now dominate the sector, accounting for $6.4 billion monthly, as companies increasingly use stablecoins to bypass delays in traditional international banking systems; Bloomberg also covered this trend.

However, the Fed's plan has sparked debate. Critics, including Senator Elizabeth Warren (D-Mass.), argue that the GENIUS Act's light-touch approach risks exposing financial stability to operational failures and regulatory arbitrage. Warren cited a recent incident where Paxos accidentally minted $30 trillion in stablecoins, warning that inadequate safeguards could destabilize the market. She urged the Treasury Department to clarify how it will enforce the law and what additional congressional authorizations might be needed, as noted by Lookonchain and as Coinotag reported.

Meanwhile, industry players are adapting to the evolving landscape. Modern Treasury, a fintech firm specializing in blockchain payments, recently acquired Beam, a stablecoin infrastructure startup, in a $40 million all-stock deal. The acquisition underscores growing demand for programmable payment solutions as companies like Salesforce-backed Modern Treasury expand into stablecoin-enabled services, Blockonomi reported.

The Fed's proposal also raises questions about commercial bank disintermediation. By granting stablecoin issuers direct access to Fed rails, the central bank could erode the role of traditional banks in facilitating stablecoin redemptions. Arthur Hayes, co-founder of BitMEX, warned that this could "destroy commercial banking in the U.S.," though Fed officials emphasized that restrictions on interest and overdrafts are designed to prevent the Fed from becoming a primary deposit taker, as CryptoSlate previously reported.

As the Fed seeks stakeholder feedback on the proposal, the regulatory and market dynamics around stablecoins continue to evolve. With the GENIUS Act providing a legal foundation and the Fed offering infrastructure access, the sector is poised for further growth—though balancing innovation with systemic risk remains a critical challenge for policymakers, according to the Invezz report and subsequent Bloomberg coverage.