On Tuesday, US President Donald Trump issued an executive order directing the federal government to revise its regulatory frameworks in order to incorporate “digital assets and innovative technology into traditional financial services and payment systems.”
The order said:
“It is therefore the policy of the United States to streamline regulatory processes, reduce unnecessary barriers to entry, and encourage collaboration between fintech firms, federally regulated financial institutions, and Federal financial regulators.”
Expanding Crypto-linked Access to Fed Payment Services
The document recommends that the United States integrate financial technology services into its preexisting payment and banking infrastructure.
Over the next three months, the chiefs of financial regulators are required by the order to evaluate their current laws and identify any regulations or documents that unfairly prevent fintech companies from forming relationships with banks authorized by the federal government.
As a consequence of the evaluation, Trump ordered regulators to take action within six months to promote innovation. Among these measures is a request that the Federal Reserve Board of Governors examine the current system for providing payment accounts and services to non-bank financial enterprises and uninsured depository institutions.
Additionally, this evaluation inquires as to whether or not the twelve Federal Reserve banks have the authority to issue payment accounts apart from the board. Special purpose depository institutions in Wyoming and other jurisdictions with comparable structures may be particularly well-served by this provision. An SPDI based in Wyoming, Kraken, was earlier this year allowed access to a restricted version of the Federal Reserve Bank of Kansas’s so-called master account. Similar access has been requested by other firms.
After unveiling a plan in December to provide access to some businesses, the Federal Reserve is now hard at work creating a more official “skinny” master account.
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