On February 10, Federal Reserve Board Governor Christopher Waller stated that the Fed plans to launch “Simplified Master Accounts” by the end of this year, providing limited access to the federal payment system and U.S. monetary infrastructure for select institutions. The move aims to advance payment system access in the absence of broader congressional crypto regulation.
Key Restrictions of Simplified Accounts
Waller emphasized that simplified master accounts differ significantly from traditional master accounts, including:
- No interest payments on balances
- No borrowing via the discount window
- Public feedback has been sought, but disagreements remain between the crypto sector and community banks over whether non-traditional financial institutions should access parts of the U.S. payment system. Waller noted the Fed will continue refining these issues, aiming for implementation within the year if conditions allow.
KYT Compliance Tools Gain Attention
In the evolving regulatory landscape, tools like Trustformer KYT are becoming increasingly critical. By enabling real-time on-chain monitoring and transaction screening, institutions can:
- Comply with anti-money laundering (AML) requirements
- Fulfill customer due diligence (KYC) obligations
- Ensure transaction security and risk management when accessing simplified master accounts
- Industry experts note that with lower entry barriers for crypto institutions and the opening of the Fed’s payment system, KYT solutions are now core tools for compliance and internal risk control.
Market Environment Overview
Waller observed that following the initial crypto market excitement from the previous administration, major crypto asset prices have fallen. For example, Bitcoin dropped from a historical high of ~$126,000 last year to around $70,000, reflecting typical crypto market volatility.
Industry Significance
The simplified master account program provides limited access channels for crypto institutions while strengthening regulatory oversight and risk control. Combined with Trustformer KYT’s on-chain transaction monitoring, institutions can safely engage with the U.S. payment system, supporting sustainable growth in crypto payments, clearing, and transactional security.