Fed Considers Direct Crypto Settlement Access as Banking Partnerships Prove Fragile

The Federal Reserve is weighing a historic shift that would allow cryptocurrency firms direct access to payment settlement infrastructure. This comes after the 2023 collapses of Silvergate and Signature Bank exposed the vulnerabilities of relying on intermediary banks for dollar transactions.

Currently, crypto exchanges must route dollar settlements through partner banks—a system that nearly collapsed when these banking relationships failed. The Fed's proposed 'payment account' system, open for public comment until December 2025, would grant qualified non-banks limited clearing privileges without full banking rights.

The policy shift gained momentum on May 19 when President Trump signed an executive order mandating the integration of fintech innovation into financial regulation. Market observers note this could reduce systemic risk by removing crypto's dependence on a handful of banks.