[U.S. Congress Discusses Federal Reserve's 'Skinny Master Account,' Evaluates Whether Crypto and Fintech Companies Can Directly Access Central Bank Payment Systems] Odaily Planet Daily News – The U.S. House Financial Services Committee held a hearing on Wednesday to discuss the evolving roles of banks and fintech companies, with a key focus on the Federal Reserve's consideration of a 'skinny master account' proposal. This proposal would allow certain crypto banks and fintech companies limited direct access to the Federal Reserve's payment system. A Federal Reserve master account enables financial institutions to directly use the Fed's payment network and gain the most direct access to the U.S. dollar monetary system. Institutions without such accounts typically rely on partner banks with master accounts to provide services. The so-called 'skinny account' is a restricted-function version designed to provide limited access for new types of financial institutions. Republican Representative Dan Meuser stated during the hearing that access to the Federal Reserve's payment system is no small matter, and the core issue is determining which institutions should be allowed to directly use these critical payment rails. Traditional institutions like community banks are concerned that crypto and fintech companies, which are not subject to equally stringent regulations, could pose risks to security and stability if granted direct access. The crypto industry, on the other hand, broadly supports the proposal, arguing that direct access to the Federal Reserve's payment system should have been opened long ago, as it would reduce reliance on intermediary banks and foster innovation. In May of this year, former President Trump signed an executive order requiring the Federal Reserve to evaluate policies for opening central bank payment rails to fintech companies, including crypto firms. Previously, in March, the Kansas City Federal Reserve approved Kraken's parent company, Payward, for a 'limited purpose account,' sparking market discussions about the extent to which crypto and fintech companies should directly access Federal Reserve services. A representative from Anchorage Digital stated during the hearing that if the U.S. wants to maintain its position as a global financial center, it must allow for innovative federal and state-level regulatory frameworks.