Executive Order Directs Review of Crypto Firms' Access to Payment Services

An executive order directs the federal government to update regulatory frameworks for integrating digital assets and innovative technology into traditional financial services and payment systems. The order states that the United States should foster financial technology services into existing payment and financial services rails.

It directs heads of financial regulators to review existing rules over the next three months and identify any rules that unduly impede fintech firms from entering into partnerships with federally regulated institutions.

Within six months, regulators are directed to take steps to encourage innovation as a result of the review. The order asks the Federal Reserve Board of Governors to review how it allows uninsured depository institutions and non-bank financial firms access to payment accounts and services.

The review also asks the 12 Federal Reserve banks if they can act independently of the board to grant payment accounts. This provision may specifically benefit Wyoming special purpose depository institutions and entities operating under a similar framework.

The Federal Reserve Bank of Kansas already granted Kraken, a Wyoming SPDI, access to a limited version of its master account earlier this year. The Federal Reserve is working on developing a more formal skinny master account, publishing a proposal last December to enable access for some firms.

This is the second executive order signed on the same day. Another order directs the Treasury Department and financial regulators to figure out how to strengthen the Bank Secrecy Act to block undocumented immigrants from having access to bank accounts or payment services.

The order directs the Treasury Department to consider the strategic use of unregistered money services businesses, third-party payment processors, or peer-to-peer platforms to facilitate off-the-books wage payments intended to bypass Bank Secrecy Act reporting thresholds or tax obligations.