Ripple had previously applied for a Fed master account back in July of this year, which would enable the company to connect directly to the US central bank’s payment infrastructure, circumventing the need for intermediaries.
However, in a notable policy shift, Fed Governor Christopher Waller recently indicated that the central bank is considering a “skinny” master account.
This account would allow firms to access Fed payment services without offering other key benefits, such as interest payments, overdraft privileges, or access to emergency lending.
Alderoty emphasized the importance of redeemability, stating that having access to a master account would provide the most efficient and transparent means to manage US dollar assets and Treasuries.
Additionally, he mentioned that these “skinny” accounts could allow crypto institutions access to Fed payment rails on a “streamlined timeline,” albeit without certain advantages like interest on account balances or overdraft options.
However, Wall Street veteran Caitlin Long, who is also founder and CEO of Custodia, a Wyoming-chartered crypto bank that has long sought a full-fledged master account, expressed caution on the idea of such concepts.
She pointed out that Waller’s announcement specified that the Federal Reserve’s new program would apply only to “legally eligible entities,” highlighting the importance of the details in the implementation.
At the time of writing, the firm’s associated cryptocurrency, XRP, was trading at $2.22, indicating significant losses in line with the broader crypto market’s current downturn. Over the last 24 hours and seven days, the altcoin has lost 6% and 8% in value, respectively.
Featured image from DALL-E, chart from TradingView.com
