America should not settle for a subpar payments system, argues Rachel Anderika of Anchorage Digital, emphasizing that any institution eligible for the banking system should also have straightforward access to the payment system.
As we move towards a more digital future, transactions via credit cards, peer-to-peer apps, or bank applications will likely include stablecoins, often without users even realizing it. However, the infrastructure facilitating these transactions is undergoing significant improvements.
This transformation is already evident, as the total circulation of stablecoins has surged from approximately $250 billion in July to over $310 billion today, marking a nearly 25% increase. This rise has prompted Congress and former President Donald Trump to introduce the GENIUS Act last year, which establishes federal regulations for the dollar's global movement through U.S. institutions, ensuring compliance with BSA, AML, and sanctions protocols. Such measures are essential for maintaining the dollar’s global dominance and making it accessible to a wider audience.
In my role as Head of Global Operations at Anchorage Digital, I often reflect on this impending change from two distinct perspectives, both leading to the same conclusion. Anchorage Digital is recognized as the first federally chartered digital asset bank in the U.S. and the pioneer in federal stablecoin issuance. My background as a former national bank examiner at the Office of the Comptroller of the Currency (OCC) has reinforced my belief that broadening the federal regulatory perimeter strengthens America.
Anchorage Digital Bank, N.A. exemplifies this principle. Despite our efforts to expand regulatory boundaries through compliant crypto banking, we find ourselves restricted from directly accessing the Federal Reserve’s payment systems due to how master account access has been managed, not due to legal barriers. This forces us to depend on partner banks for transactions involving funds we are already authorized to handle. Such frameworks that require federally regulated banks to rely on others for fund transfers introduce unnecessary risks and inefficiencies into our financial system.
This flawed system has previously caused significant challenges. In 2023, Anchorage Digital Bank faced debanking by a partner bank with just 30 days' notice, putting payroll and client transactions at risk and nearly jeopardizing our operations.
Fortunately, there is growing recognition of this issue in Washington. The Federal Reserve is currently drafting regulations to enhance access to its payment systems, while Congress is considering similar legislation. Additionally, the White House has initiated a thorough review of the Federal Reserve’s policies regarding access to its payment rails. This increased focus is promising, but the specifics are crucial.
The Federal Reserve’s proposed "skinny" payment account, however, does not adequately address the issue. It would impose reserve limits, offer no interest, lack intraday credit, and restrict access to critical networks such as Fedwire Securities and FedACH, which facilitate about half of all U.S. payments. Without these capabilities, banks like ours will still need to rely on third parties nightly, reintroducing the risks the skinny account was designed to eliminate. While the concept appears sound, it essentially perpetuates existing dependencies. America should not create a second-class payment system for federally regulated trust banks.
There is an ongoing debate regarding whether unregulated fintechs should gain access to the Federal Reserve's payment systems. Our stance is clear: such entities should first obtain prudent regulation before being granted full access. However, this discussion is separate from whether a federally chartered national trust bank, supervised by the OCC and held to the same standards as other national banks, should receive the same services from the Federal Reserve as its counterparts. Mixing these issues undermines both arguments.
The Federal Reserve payment system should be a secure environment, and while there are valid concerns about allowing unregulated entities access, the criteria for access should be based on sound regulation rather than arbitrary distinctions. Membership in the Federal Reserve should guarantee access to its payment systems. Otherwise, misplaced barriers could push innovation offshore, beyond the reach of U.S. regulators.
Some cite the absence of FDIC insurance as a reason for caution, but this conflates different types of risk. FDIC insurance mitigates risks associated with banks lending out deposits, which does not apply to a fully reserved custodial bank like Anchorage Digital Bank. Even in the case of stablecoin issuance, which many national trust banks are now pursuing, it operates as full-reserve banking. Every stablecoin is backed 100% by reserves, eliminating the risks associated with fractional reserve banking. Access to the Federal Reserve payment system should be based on actual risks, not outdated assumptions from different banking models. These distinctions should inform how access to payment systems is evaluated.
What is necessary is not more studies reiterating established banking laws, but a clear, consistent standard applied uniformly across the Federal Reserve system, ensuring that similarly regulated banks have full access to Federal Reserve master accounts. Without such standards, institutions that have chosen the path of federal oversight may find themselves excluded from the very system they are meant to be part of.
Federal oversight must align with federal infrastructure. If an institution qualifies for participation in America’s banking system, it should also have a straightforward route to accessing America’s payment system.
Same charter. Same supervision. Same access.
Note: The opinions expressed in this article are those of the author and do not necessarily represent the views of CoinDesk, Inc. or its affiliates.