Over two days in May 2026, the White House and the Federal Reserve took coordinated steps that could, for the first time, give nonbank payment and digital-asset firms a direct, limited channel into the central bank’s payment rails. On May 19, 2026, President Trump issued an Executive Order titled “Integrating Financial Technology Innovation Into Regulatory Frameworks” (the Order). The following day, the Board of Governors of the Federal Reserve System (the FRB) requested public comment on a proposal to create a special-purpose “Payment Account” at the Federal Reserve Banks (the Reserve Banks) (the Proposal).

Direct access to Federal Reserve accounts and services has long been the objective—and the obstacle—for fintech and crypto firms operating outside the traditional banking perimeter. The Proposal does not hand these firms a full-service master account, but it offers something many of them have been seeking: a defined, supervised path to clear and settle their own payments through the Federal Reserve. For institutions weighing U.S. market entry or expansion, the practical question is no longer whether such access exists, but whether the Payment Account’s constraints fit the business model. This alert summarizes the developments and flags what they mean for clients considering an application.

The Payment Account is built for one job: clearing and settling the holder’s own payments. Eligible institutions (those qualifying under the Federal Reserve Act or other federal statute) could access the Fedwire Funds Service, FedNow, the National Settlement Service and the Fedwire Securities Service (free transfers only), but not FedACH.

The account is defined as much by its constraints: it must be prefunded (no intraday credit), carries no discount-window access (Regulation A) and no interest (Regulation D), cannot participate in an excess balance account, and is capped at a $1 billion overnight balance (a change from the December 2025 RFI).

Holders may not act as correspondent or respondent banks, though they may settle as an intermediary. Review timelines—newly specified—45 days for Tier 1 and 90 days for Tier 2 and Tier 3 applicants—respond to long-standing complaints about open-ended processing, and the Proposal adds detailed illicit-finance terms that let a Reserve Bank condition, restrict or terminate access based on an applicant’s compliance posture.