The Federal Reserve seeks public comment on establishing limited "payment accounts" for certain financial institutions

Deep Tide TechFlow News, December 19th, according to Jin10 Data, reports that the Federal Reserve announced on Friday that it is seeking public input on establishing limited “payment accounts” for some financial institutions. These accounts would allow these institutions to use the Federal Reserve’s payment services for clearing and settlement, but would not enjoy the broader rights currently available to banks. Federal Reserve Board member Waller stated that such accounts could “support innovation” while safeguarding the security of the payment system. If these accounts are established, they will differ from the Federal Reserve’s main accounts, will not pay interest, and will not provide Federal Reserve credit services. These accounts will also be subject to balance limits. Waller first proposed the idea of establishing such accounts in October last year, at a time when the Federal Reserve was seeking a balance that would allow financial technology companies and other institutions to more broadly use the Fed’s payment services without granting full main account privileges to less regulated entities.