[Suit Up]

HOME / INSTITUTIONS / Federal Reserve (Board of Governors and Federal Reserve System)
Institution profile

Federal Reserve (Board of Governors and Federal Reserve System)

Central bank

The Federal Reserve is the US central bank and the supervisor for state member banks, bank holding companies, and savings and loan holding companies, and on tokenisation it is the agency whose posture has mattered most for plumbing and least for legislation. The Fed's tokenisation surface has three load-bearing components: master account access for digital-asset-active banks (the structural gating decision that determines which entities can settle directly on Fedwire and access reserve balances), the supervisory framework for bank digital-asset activities (which moved from supervisory letters SR 22-6 and SR 23-7 cautioning state member banks to the post-2025 less-restrictive posture), and the FedNow operational rail (which sits in conventional payment-system territory rather than tokenised-money territory). For a tokenisation operator, the Fed's posture is less visible than the OCC's interpretive-letter cadence and less prescriptive than the SEC's wrapper-determinative framework, but it is the agency that decides whether tokenised commercial bank money ever connects to central-bank-money settlement at scale.

Role in tokenisation

The Fed's three roles map differently to tokenisation than the other federal regulators. First, master account access. A Federal Reserve master account is the bank account a financial institution holds at a Reserve Bank, and it is the account that allows direct settlement on Fedwire and direct holding of reserve balances. The set of institutions eligible for master accounts has historically been narrow (commercial banks, US branches of foreign banks, certain trust companies and government-sponsored enterprises), and the Fed's master-account access guidelines (finalised August 2022) introduced a tiered framework that explicitly contemplates requests from novel charter types including state-chartered SPDIs and federally chartered trust banks. As of April 2026, no OCC trust bank charter holder has been granted a master account on the basis of the charter alone, and the question of whether a holder of an OCC national trust bank charter (Anchorage as the worked example) is automatically eligible remains open. The decision is one of the most consequential structural questions in US tokenisation: master account access for crypto-native trust banks would collapse a multi-bank intermediation chain and give those firms direct central-bank-money settlement.

Second, the supervisory framework for bank digital-asset activities. SR 22-6 (August 2022) required state member banks to provide advance notice of intended cryptoasset activities and to obtain supervisory non-objection. SR 23-7 (August 2023) extended a similar non-objection requirement for state member banks engaging with dollar-token activities including stablecoin issuance and settlement. Both letters were rescinded in 2025 as part of the post-administration-change recalibration, with the supervisory posture moving to a risk-based framework that does not require advance notice for activities consistent with applicable law. The structural read is that state member banks now have meaningfully wider latitude to engage with tokenised-deposit and stablecoin work without case-by-case supervisory pre-clearance.

Third, FedNow as the conventional payment-system anchor. FedNow launched in July 2023 as the Fed's instant-payment service, settling 24/7 between participating banks. FedNow is not a tokenised rail; settlement runs through conventional reserve accounts. The structural question for tokenisation is whether the Fed authorises a FedNow-adjacent on-chain bridge (a tokenised-deposit settlement layer that interoperates with FedNow at the central-bank-money level), and as of April 2026 no such bridge has been authorised. Wholesale tokenised-cash plumbing in the US continues to sit inside individual bank ledgers (Kinexys is the worked example) without a Fed-operated coordination layer.

Operating model

The Fed's regulatory toolkit on tokenisation is structurally different from the OCC's or the SEC's because the Fed is also a monetary authority and an operator of payment systems. The Board of Governors sets the supervisory framework for state member banks, bank holding companies, and the largest US bank holding companies (the GSIB cohort) under the Federal Reserve Act and the Bank Holding Company Act. The 12 Reserve Banks operate Fedwire and FedNow, hold reserve balances, and process master account applications. The Federal Open Market Committee sets monetary policy, including the interest rate on reserve balances that determines the structural attractiveness of bank deposits versus alternative dollar holdings.

The master account framework is the most operationally consequential tokenisation-relevant Fed function. The 2022 final guidelines tiered applicants into three categories: tier 1 (federally insured institutions), tier 2 (institutions that are not federally insured but subject to federal prudential supervision), and tier 3 (institutions subject neither to federal insurance nor federal prudential supervision). Custodia Bank's denied master account application (a Wyoming SPDI charter holder) and the subsequent litigation produced one of the few public decisions on tier 3 access. The OCC trust bank charter holders (Anchorage, conditional approvals for Circle, Ripple, BitGo, others) sit in tier 2 if the OCC charter is read as federal prudential supervision; whether the Fed accepts that reading is the operational question.

The supervisory framework on bank digital-asset activities post-2025 is permissive but not silent. State member banks engaging with tokenised deposits, stablecoin reserve management, or crypto custody are expected to maintain risk management commensurate with the activity and to comply with applicable law including BSA/AML, consumer protection, and capital requirements. The post-2025 posture removes the case-by-case pre-clearance requirement but retains the underlying expectation that the activity is conducted in a safe and sound manner.

Why it matters

Three structural reasons. First, master account access is the structural lever in the US payment hierarchy. An institution with a master account holds reserve balances directly at the Fed and settles directly on Fedwire; an institution without a master account banks at a bank that has one. The differential is the difference between participating in the central-bank-money layer and participating one step removed. For OCC trust bank charter holders, the master account question determines whether the federal charter is a structural moat or a regulatory checkbox. Second, the Fed's posture on tokenised-deposit settlement infrastructure determines the architectural ceiling for US bank-money-on-chain. Without a Fed-operated coordination layer (analogous to Fedwire for tokenised reserves), cross-bank tokenised-deposit settlement remains a bilateral or consortium problem. Kinexys, Partior-equivalent multi-bank constructions, and the longer-tail question of whether a Fed-adjacent shared ledger materialises all sit downstream of the Fed's posture. Third, the supervisory recalibration on bank digital-asset activities post-2025 is the structural unlock for state member banks (the cohort that includes a significant share of US regional and community banks) to engage with tokenised work without supervisory friction.

The competitive frame is partly the OCC (which sets bank-side custody, stablecoin reserve, and tokenised-deposit perimeters under the national-bank framework), partly the FDIC (which sets the deposit-insurance and resolution perimeter), and partly the BIS Innovation Hub and other central-bank R&D venues that have produced more visible wholesale-CBDC and tokenised-settlement work than the Fed has.

Recent moves

    1. No OCC national trust bank charter holder has been granted a master account on the basis of the charter alone as of April 2026.
  • December 2025. OCC, Federal Reserve, and FDIC publish proposed rules implementing the GENIUS Act payment-stablecoin perimeter (Federal Register OCC GENIUS rule).
    1. SR 22-6 and SR 23-7 rescinded; supervisory posture moves to a risk-based framework without advance-notice pre-clearance.
  • August 2023. SR 23-7 published, extending non-objection requirements for dollar-token activities.
  • July 2023. FedNow launched as the Fed's instant-payment service for participating banks.
  • August 2022. Master account access guidelines finalised, introducing the tiered framework.
  • August 2022. SR 22-6 published, requiring state member banks to provide advance notice of cryptoasset activities.

Open questions

  • Whether the Fed extends master-account access to OCC trust bank charter holders. Anchorage is the test case; Circle, Ripple, BitGo, Paxos, Fidelity Digital Assets are the next-cohort observers.
  • Whether the Fed authorises a FedNow-adjacent on-chain bridge for tokenised-deposit settlement, or whether wholesale tokenised-cash plumbing stays inside individual bank ledgers.
  • How the Fed treats reserve-balance holdings by federally qualified non-bank GENIUS issuers; whether such issuers can hold reserves directly at the Fed or must hold them through a correspondent bank.
  • Whether the Fed publishes wholesale-CBDC research at the depth of the BIS Innovation Hub portfolio. Retail CBDC has been effectively foreclosed by GENIUS; wholesale CBDC has not been ruled out.
  • Agentic commerce posture. The Fed has not published on AI agents holding reserve balances or transacting on Fedwire/FedNow on behalf of beneficial owners.

Related