U.S. Banks Oppose Direct Federal Reserve Access for Crypto Firms

Major U.S. banking organizations have expressed opposition to crypto and fintech companies gaining direct access to the Federal Reserve's payment system. According to NS3.AI, these banks have requested a 12-month observation period before any applications from such companies are considered. Additionally, they urge the Federal Reserve to limit access for regulated stablecoin issuers until their operational safety is demonstrated. Concerns have been raised regarding the 'streamlined account' proposal, which banks argue could introduce new risks, such as bank runs, and allow these companies to bypass traditional partner banks. The banking organizations emphasize the need for careful evaluation to ensure the stability and security of the financial system.