The Skinny Fed Account: Ripple’s Bold Move to Charm Banks

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It is a truth universally acknowledged, that a blockchain payment company in possession of good fortune, must be in want of a Federal Reserve account. 📜 Ripple, through its ever-persuasive chief legal officer, Stuart Alderoty, has thrown its support behind the notion of a “skinny” Federal Reserve payments account designed for non-banking entities. This proposal, it is claimed, may alleviate the concerns of traditional banks regarding financial stability and competitive risks-though one cannot help but wonder if the banks will be so easily placated. 🤔

Ripple Seeks Fed Master Account

In a conversation with Reuters, Mr. Alderoty described the idea as “attractive,” suggesting it might soothe the nerves of conventional banks who fear the encroachment of lightly-regulated non-banks. 🏦 Indeed, who would not be reassured by a “skinny” account? One imagines it to be akin to a corset-tight, restrictive, and perhaps a little uncomfortable, but undoubtedly effective in achieving its purpose.

Ripple, ever the ambitious suitor, had previously applied for a Fed master account in July of this year. Such an account would permit the company to connect directly to the US central bank’s payment infrastructure, bypassing the need for intermediaries-a prospect as thrilling as a clandestine rendezvous. 💌 However, the Federal Reserve has historically been cautious about granting access to its payment systems to less-regulated entities, citing concerns from banks about potential risks to the financial system. One might say the Fed has been as guarded as a debutante at her first ball. 🕴️

Yet, in a turn of events as surprising as a second dance at a country assembly, Fed Governor Christopher Waller recently hinted that the central bank is considering a “skinny” master account. This account would allow firms to access Fed payment services without offering other key benefits, such as interest payments, overdraft privileges, or access to emergency lending. A frugal offering, to be sure, but one that might still serve Ripple’s purposes admirably. 🕴️💼

Industry Leaders Weigh In

Mr. Alderoty, never one to mince words, emphasized the importance of redeemability, stating that access to a master account would provide the most efficient and transparent means to manage US dollar assets and Treasuries. 🌟 Mr. Waller, however, cautioned that the concept remains a prototype and is subject to change. He noted that the intended use of such accounts would be limited, aiming to avoid encroaching on the traditional banking sector’s operations. A prudent measure, no doubt, lest the banks feel slighted. 🏦💔

Additionally, Mr. Waller mentioned that these “skinny” accounts could allow crypto institutions access to Fed payment rails on a “streamlined timeline,” albeit without certain advantages like interest on account balances or overdraft options. A bittersweet proposition, indeed. 🍬 Yet, Caitlin Long, founder and CEO of Custodia, a Wyoming-chartered crypto bank, expressed caution on the idea. She pointed out that Mr. Waller’s announcement specified that the Federal Reserve’s new program would apply only to “legally eligible entities,” highlighting the importance of the details in the implementation. One imagines her raising an eyebrow as she delivered this verdict. 👀

At the time of writing, Ripple’s associated cryptocurrency, XRP, was trading at $2.22-a figure as disheartening as a cancelled ball. 📉 Indeed, the altcoin has lost 6% and 8% in value over the last 24 hours and seven days, respectively, aligning with the broader crypto market’s current downturn. One hopes this is but a temporary setback, much like a regrettable choice of dance partner. 🕺

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2025-11-07 10:14