Federal Reserve’s Waller Declares ‘New Era’ for Crypto Integration in U.S. Payments System

Waller said the Federal Reserve now views crypto and DeFi as central to the future U.S. payments sector.

The Fed plans to test “skinny master accounts” to give fintechs limited direct access to payment methods.

The change follows the Fed’s withdrawal of restrictive crypto policies and focus on modernizing payment systems.

Federal Reserve Governor Christopher Waller has announced a major policy shift, stating that the United States is entering a “new era” in digital payments, one that recognizes decentralized finance (DeFi), distributed ledgers, and crypto as integral to the financial system

Speaking at the central bank’s first-ever Payments Innovation Conference in Washington on Tuesday, Waller emphasized that digital assets will “no longer be on the fringes” and that the Federal Reserve intends to play an “active role” in shaping how these technologies evolve. His comments came as Bitcoin traded higher, climbing from around $108,000 at the start of the event to $110,321 during his remarks.

Fed Opens Door to Crypto Engagement

Waller’s remarks reflect one of the most significant shifts in the Federal Reserve’s attitude toward digital assets. According to him, the DeFi industry is now being welcomed into discussions on the future of U.S. payments

“The DeFi industry is not viewed with suspicion or scorn,” he told attendees. “Today, you are welcomed to the conversation on our home field.” His tone is a clear departure from the skepticism that previously characterized Washington’s stance on crypto regulation.

Over the past year, the Fed has quietly withdrawn several restrictive policies that discouraged banks from engaging with crypto markets. It also removed “reputational risk” assessments from its supervisory framework, a move many in the industry viewed as a barrier to digital asset innovation. This policy change follows growing pressure to modernize payment infrastructure and adapt to fast technological moves in the sector.

Prototype for ‘Skinny Master Accounts’

To support this transition, Waller outlined a new proposal called a “payment account” framework. The initiative, which he referred to as a “skinny master account,” would give fintech firms and payment providers limited direct access to the Federal Reserve’s payment methods

These accounts would not pay interest, have balance caps, and exclude overdraft privileges. However, they would enable institutions focused on digital payments to settle transactions directly with the Fed instead of relying on partner banks.

According to Waller, this model could improve efficiency and expand central bank access for legally eligible entities engaged in digital innovation. “Payments innovation moves fast, and the Federal Reserve needs to keep up,” he said. The concept aims to ensure stability while maintaining safeguards on account size and risk exposure.

Digital Assets Becoming Integral

Waller noted that distributed ledgers and cryptocurrencies are increasingly embedded in financial systems worldwide. He emphasized that these technologies are “woven into the fabric of the payment and financial systems,” indicating their permanence in global finance. The ongoing conference also includes panels on tokenization and stablecoins, signaling the central bank’s growing engagement with the digital asset industry.

Waller, one of seven members of the Federal Reserve Board of Governors, was nominated by former President Donald Trump in 2020. His comments are a step in redefining the Federal Reserve’s approach to the rapidly changing digital economy.

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