By Pete Schroeder
WASHINGTON, May 20 (Reuters) – The U.S. Federal Reserve proposed Wednesday adopting a new, more limited form of a payment account that would allow firms like fintechs the ability to move money across the Fed’s payment rails without enjoying all the backstops available to traditional banks.
In a statement, the Fed said the proposed accounts would not include access to intraday credit or the Fed’s discount window, nor would firms earn interest on reserves held at the Fed. The proposal stems from earlier work the Fed did exploring the slimmed down accounts, as it explores ways to balance granting more firms access to its payments infrastructure without injecting undue risk into the financial system.
(Reporting by Pete Schroeder, Editing by Franklin Paul)
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