The Federal Reserve Seeks Feedback on Proposal to Establish Limited "FedNow Accounts" for Certain Financial Institutions

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The Federal Reserve announced Friday it’s seeking feedback on creating limited “payment accounts” for certain financial institutions. These accounts would let institutions use the Fed’s payment services for clearing and settling transactions—but won’t grant the broader access to facilities that banks currently enjoy. Fed Governor Christopher Waller noted such accounts could “support innovation” while safeguarding the payment system’s security. If established, the accounts would be separate from the Fed’s master accounts, earn no interest, and not have access to the Fed’s credit services. They’d also be subject to balance limits. Waller first floated the idea last October, as the Fed aimed to balance enabling wider use of its payment services by fintech firms and other entities—without giving full master account access to less-regulated groups.