I just did a Twitter search for "master accounts" and "fintech" and it seems I'm almost alone in discussing the issue here! Yet the Fed is now seeking comments on how it should treated special-purpose bank (fintech) applications for such accounts.
Many of these fintechs wish to offer cryptocurrency exchange and custodial services, but without direct access to the Fed can only do so by partnering with ordinary banks, which is costly, especially since many banks are reluctant to deal with them.
The Fed will almost certainly get dozens of comment letters from banking-industry groups who want to deny fintechs that lack full-fledged bank charters, deposit insurance, and so on, direct access to the Fed's wholesale facilities.
I've chimed-in with what I think is a reasonable set of comments aimed at allowing the Fed to open its doors to special-purpose banks that steer clear of risky maturity transformation. cato.org/public-comment…
I may be almost alone in doing so. I've also trued to draw the public's attention to this important issue on @DavidBeckworth's MacroMusings podcast and elsewhere: mercatus.org/bridge/podcast…
So how 'bout some bouquets from bitcoiners, legions of whom never fail to to pile-on me if I occasionally rain on their parade, though I've never once argued for policies other than ones aimed at allowing Bitcoin to flourish?
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