The Federal Reserve has moved from talk to paper on its so‑called “skinny” master accounts. On December 19, the Board published a request for information on a new limited-purpose “payment account” that would let eligible firms clear and settle payments directly on Fed rails without the full privileges of a traditional master account. Wyoming Senator Cynthia Lummis immediately framed the move as the end of “Operation Chokepoint 2.0,” the alleged campaign that froze crypto firms out of banking.
Bitcoin traded near $87,500, roughly flat on the day, while ether hovered around $2,925 and solana around $123. The market treated the announcement as a structural story, not a short‑term catalyst. The real action sits with banks, trust companies and crypto custodians that have spent years fighting for direct Fed access.
What the Fed actually put on the table
The Fed’s payment account prototype would sit alongside, not replace, existing master accounts. Under the proposal, payment accounts would not pay interest, would not have access to Fed credit, and would carry balance caps and strict overdraft limits, according to the Board’s release and supporting memo. Any transaction that drives the balance below zero would simply fail. The account would be usable only for clearing and settlement on services such as Fedwire and FedNow.
Governor Christopher Waller has been seeding this concept since his October remarks at the Fed’s Payments Innovation Conference, where he urged staff to explore a streamlined “payment account” for firms that now depend on correspondent banks for access to Fed rails. Reuters later reported that Waller wants the new accounts operational by the fourth quarter of 2026, and that the Fed will phase out “master account” in favor of the more neutral “payment account” label in official language.
The new RFI keeps eligibility narrow. Only institutions that already qualify for Fed accounts under the Federal Reserve Act can apply. The Fed stresses that the prototype “does not seek to expand or otherwise change legal eligibility” for access. In practice, that means crypto players still need some form of bank, SPDI, or national trust charter before they even get in line.
Lummis declares victory over Operation Chokepoint 2.0
Lummis, who has spent years grilling regulators over debanking, immediately claimed Waller’s framework finishes the job that Congress and the Trump White House started. Cointelegraph quoted her reaction to the skinny account model:
“Governor Waller’s skinny master account framework ends Operation Chokepoint 2.0 and opens the door to real payments innovation. Faster payments, lower costs, better security. This is how we build the future responsibly.”
Her stance fits a broader campaign. In January she accused the FDIC of destroying materials related to Operation Chokepoint 2.0 in a letter that demanded the agency “immediately halt” any document destruction tied to digital assets and bank supervision, published on her Senate site. She has also pressed the Fed over its 2023 policy statement that described many digital asset activities as inherently “unsafe and unsound,” arguing that language gave supervisors cover to keep crypto banks out of the system.
Trump’s August executive order that barred banks from debanking customers without lawful cause and directed regulators to identify offenders gave Lummis more leverage. Yet even after that order, Strike CEO Jack Mallers and several stablecoin startups reported fresh account closures by major banks this fall, a pattern Lummis herself described as proof that “Operation Chokepoint 2.0 regrettably lives on” in a prior X post. Her new claim that Waller’s framework “ends” it reads more as a political marker than a statement of present reality.
What changes for crypto-native banks
For years, crypto-forward institutions such as Custodia Bank, Kraken Bank and Anchorage Digital have tried to secure full master accounts, often under Wyoming SPDI or OCC trust charters. Many ran into outright denials or indefinite delays, then had to sue or scale back plans. Industry lawyers and former regulators pointed to that pattern as the real machinery behind Operation Chokepoint 2.0, even as agencies denied any coordinated campaign.
Waller’s “skinny” construct gives these firms a narrower target. A payment-only bank or national trust that clears institutional stablecoin flows, for example, might not need interest on reserves or the discount window. It needs predictable, always‑on settlement. That is exactly what payment accounts aim to provide. A PwC regulatory note on the December 19 RFI highlighted proposed balance caps of the lesser of $500 million or 10% of the holder’s total assets, a 90‑day response deadline for applications, and outright rejection of any transaction that creates an intraday overdraft.
That tradeoff already appeals to some of the biggest names in crypto finance. Ripple’s chief legal officer told Reuters that a skinny account would still be a “game changer” for its dollar stablecoin, since it would let the firm redeem and deploy reserves directly instead of routing every leg through correspondent banks. Anchorage and other trust banks have struck a similar tone in interviews and conference remarks, stressing that direct Fed connectivity matters more than interest income.
Not everyone at the Fed is on board
The RFI passed the Board on a 6–1 vote. Vice Chair for Supervision Michael Barr filed a rare public dissent, warning in a separate statement that the document lacks detail on safeguards against money laundering and terrorist financing by firms the Fed does not directly supervise. He signaled openness to a revised framework, but only if it tightens the control regime.
Community banks remain wary as well. The Independent Community Bankers of America, which had previously defended the Fed’s denial of Custodia’s master account as a necessary backstop, has already warned that broad access for nontraditional institutions could introduce new risks if oversight lags behind. Their concern is simple. Every new direct account holder is one less balance sheet sitting inside the traditional correspondent model.
Does this really end Operation Chokepoint 2.0?
The short answer today is no. The Fed has opened a 45‑day comment window on the payment account prototype, with formal rules and actual approvals still in front of it. Until the first crypto-native bank or trust actually clears a dollar through its own payment account, Operation Chokepoint 2.0 remains partly a question of lived experience, not law.
Even so, the direction of travel is hard to miss. Within five months, Trump’s executive order against debanking, Lummis’s document preservation campaign, and Waller’s push for “skinny” accounts have boxed regulators into a narrower set of tools if they want to keep crypto firms off the grid. For market participants, that shift matters more than today’s flat BTC candle. It tells them the Fed now accepts that digital asset institutions belong inside the plumbing, even if only through a thinner pipe.
