Federal Reserve Give Guidance For Use Of Global Payment System

The United States Federal Reserve has publishing its final guidance for new financial institutions to gain access to its master accounts, which are required for these firms to partake in the global payment system.

The announcement seems to be indicative of the countrys central bank inching closer to potentially permitting Wyoming SPDIs (Special Purpose Depository Institutions) such as Custodia and Kraken Bank to gain access to these accounts without the need for any intermediary banks.

In 2021, the Federal Reserve issued its first guidance, inviting public comments and discourse. Approximately 300 people responded, prompting a second public feedback process which took place earlier on in 2022.

The guidance is broadly similar to what was initially proposed last year, as it shall reportedly establish a multi-tiered system that will enable the Federal Reserve to tailor its evaluation process for giving access based on the type of financial institution applying. Also, each tier would correspond to a more stringent review procedure.

As such, Tier 1 banks will be federally insured under the guidance. Although Tier 2 banks would not be federally insured, prudential supervision would still be applicable for these via a federal banking agency. Finally, Tier 3 includes firms which are not federally insured and are not subject to prudential supervision, which most likely includes Wyoming cryptocurrency banks.