Trump orders Fed review of fintech access for 2 major payment systems

U.S. President Donald Trump signed an executive order Tuesday directing the Federal Reserve to review how financial technology and crypto firms are granted access to the nation's core payment systems. The move aims to integrate "digital assets and innovative technology into traditional financial services," according to the order's text.

"It is therefore the policy of the United States to streamline regulatory processes, reduce unnecessary barriers to entry, and encourage collaboration between fintech firms, federally regulated financial institutions, and Federal financial regulators," the executive order stated.

The order specifically directs the heads of financial regulators to identify rules that "unduly impede fintech firms from entering into partnerships with federally regulated institutions" over the next three months. Within six months, regulators are instructed to take concrete steps to encourage innovation. A key part of this is a directive for the Federal Reserve Board of Governors to review its framework for granting uninsured depository institutions and non-bank financial firms access to payment accounts and services.

This action could significantly lower operational barriers for the crypto industry and increase competition for traditional banks. The review explicitly asks the 12 Federal Reserve banks if they can act independently of the board to grant payment accounts, a move that could directly benefit Wyoming special purpose depository institutions (SPDIs). The Federal Reserve Bank of Kansas has already granted a limited master account to Kraken, a Wyoming-chartered crypto exchange.

A Two-Pronged Directive

The order is one of two signed by the President on Tuesday. The second focuses on preventing undocumented immigrants from accessing banking services by directing the Treasury Department to strengthen Bank Secrecy Act provisions. That order considers the use of "unregistered money services businesses, third-party payment processors, or peer-to-peer platforms to facilitate 'off-the-books' wage payments."

For the financial technology sector, the primary order is a significant step. Fintech firms have long lobbied for direct access to the Fed’s payment rails, arguing it would lead to faster and cheaper transactions for consumers. The order compels the Federal Reserve to report on its legal authority to expand such access, outline options for doing so with appropriate risk management, and identify any legal hurdles that may require legislative changes.

This article is for informational purposes only and does not constitute investment advice.