The Fed's Plan for a Slimmed-Down Crypto Account

The Federal Reserve is considering a new idea: a "skinny" account for crypto firms. This account would give them limited access to the Fed's payment system. It's not the full deal, but it's a step forward. This idea comes from Christopher Waller, a Fed governor. He thinks it could help stablecoin companies. These companies issue digital money that's tied to the value of real money, like the dollar. Right now, they don't have direct access to the Fed's payment system. They have to go through other banks. Waller's plan would change that. It would let stablecoin companies use the Fed's payment system, but with some limits. For example, they wouldn't earn interest on their balances. They also wouldn't be able to borrow money from the Fed. This idea is still in the early stages. Waller said the Fed would talk to stakeholders before making any decisions. He also said this is just a prototype idea. It's a starting point for discussion. Some people think this idea could help the dollar. David Malpass, a former World Bank president, said it could "defend the dollar's purchasing power. " He also mentioned the global competition for market share in stablecoins. But not everyone is convinced. Some people think this idea is too limited. They want full access to the Fed's payment system. They think this would give them more stability and security. Only time will tell if this idea will become a reality. But one thing is clear: the Fed is thinking about how to integrate crypto firms into the traditional financial system.