President Donald Trump signed an executive order Tuesday directing the Federal Reserve and other financial regulators to tear down barriers that have long kept crypto and fintech firms on the outside of the U.S. payment system — a move that puts the central bank at the center of a fight that has been building for years.
The order, titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” calls on the heads of federal financial agencies to audit existing rules within three months and identify regulations that “unduly impede” fintech firms from partnering with federally regulated institutions.
Within six months, regulators must act on what they find.
The Fed, crypto, and government control
At its core, the order targets the Federal Reserve’s control over master accounts — the gateway to payment rails like Fedwire that handle high-value dollar settlement across the financial system. Those accounts have historically been reserved for licensed depository institutions, a wall that forced crypto companies seeking direct payment access to pursue costly state or federal banking charters.
The order asks the Fed to do two things: evaluate whether its framework can be extended to non-bank fintech and crypto firms, and clarify whether the 12 regional Federal Reserve banks have independent authority to approve or deny master account applications without direction from the Board of Governors in Washington.
That second question carries real weight. If regional banks can act alone, crypto firms could potentially shop for a sympathetic Fed branch — a scenario that already played out in March, when the Kansas City Fed approved a limited-purpose account for Payward, the parent company of Kraken, making it the first crypto exchange to win any form of Fed payment access.
Kraken Co-CEO Arjun Sethi called the arrangement the “convergence of crypto infrastructure and sovereign financial rails.”
But the approval landed before the Fed had finalized a broader policy framework — and that sequence infuriated traditional banking groups. The Bank Policy Institute, which represents large U.S. banks, said it was “deeply concerned” by the timing.
That tension sits at the center of the debate Trump’s order now forces into the open. Rebecca Romero Rainey, president and CEO of the Independent Community Bankers of America, said the order exposes “significant gaps in regulation” between banks and non-bank entities, and argued that the Fed should pause new policies on stablecoins, master accounts, and trust charters to assess their combined impact. “Like activities should be subject to like regulation,” she said.
The Fed has been moving, if slowly, toward its own answer. In December, it published a proposal for so-called “skinny” master accounts — restricted central bank accounts that provide payment system access while excluding features like interest on reserves or discount window borrowing. The framework has drawn conflicting responses from both the crypto industry and community banks, each pushing the rules in opposite directions.
The executive order gives the Fed 120 days to deliver a formal report to the White House. That deadline transforms what has been a slow-moving regulatory process into a political one — with the Trump administration now holding a timer over an institution that prizes its independence.
