As a researcher following financial regulation, I’ve been tracking the recent executive order signed by President Trump. Essentially, it instructs the federal government to start incorporating fintech companies – including those dealing with digital assets like cryptocurrency – into the existing U.S. financial system. What’s particularly noteworthy is that, for the first time with a clear directive from the White House, the government will evaluate whether these non-bank crypto firms should have direct access to payment systems run by the Federal Reserve. This could significantly change how these companies operate within the financial landscape.
A government order issued on May 19, 2026, called “Integrating Financial Technology Innovation into Regulatory Frameworks,” outlines a new policy. This policy requires federal regulators to update rules to include digital assets and new technologies in traditional finance and payment systems. It also directs them to eliminate unnecessary and confusing regulations that make it hard for new companies to compete and unfairly favor established financial firms.
Essentially, this order does three main things: it instructs six financial regulators to update rules for fintech companies within 90 days, it asks the Federal Reserve to consider allowing crypto companies and other non-bank financial institutions direct access to payment systems within 120 days, and it defines “fintech firm” in a way that covers almost all regulated cryptocurrency activities in the U.S.
The Federal Reserve Payment-Access Question
As a researcher, I’ve been closely examining this new legislation, and I believe Section 4 is particularly important. It directs the Federal Reserve to thoroughly review the rules governing access to payment systems for a wide range of financial institutions – including those that aren’t federally insured, companies dealing with digital assets, and those directly involved in fast payment networks. Essentially, the Fed is being asked to assess the current legal landscape and see if it needs updating to address these newer types of financial players and activities.
The directive instructs the Federal Reserve to provide the President with a report – including potential solutions and recommendations – within 120 days. This report will focus on evaluating:
- The Fed’s legal authority to extend direct access to Reserve Bank payment accounts and services to “covered firms.”
- Options for expanding such access, subject to risk management requirements.
- Legal impediments that currently preclude direct access, and the legislative or regulatory steps that would enable it.
- Whether each of the 12 individual Federal Reserve Banks has independent legal authority to grant or deny access; and, if so, what FRB-level policies would ensure consistent evaluation across the system.
If the Federal Reserve (the Fed) decides current laws allow banks to directly access its services, the order asks the FRB to create clear application guidelines and to make decisions on all complete applications within 90 days of receiving them.
This is important because direct access to the Federal Reserve’s payment system – often called a “master account” – is the core of how payments work in the U.S. It allows banks to hold funds at the Fed, send and receive payments instantly, and function as a full participant in the financial system, rather than needing to rely on another bank. For a long time, companies building with cryptocurrency, including some state-chartered banks like Custodia Bank in Wyoming, have argued that being blocked from this direct access creates a significant obstacle. This forces them to use intermediary banks, which increases costs, slows down transactions, and adds risk.
The lawsuit Custodia Bank filed against the Federal Reserve in 2022 revolves around whether the Fed can refuse to allow a legally established bank to have a payment account. It also questions if the 12 Federal Reserve Banks operate separately or follow a single, consistent policy set by the Board. A recent court order requires the Fed to directly address these questions within a specific timeframe.
It’s important to understand what this order *doesn’t* do. It doesn’t tell the Federal Reserve to grant access to anyone, it doesn’t mention any particular company, and it avoids the phrase “master account,” instead using the more general term “Reserve Bank payment accounts and payment services.” This wording gives the Fed a lot of flexibility in how it’s interpreted, and any real changes will depend on what the Federal Reserve Board decides after its 120-day review.
The 90-Day Fintech Review
The order’s third section instructs the leaders of six financial regulatory agencies to examine current rules, guidelines, oversight methods, and application procedures within 90 days. These agencies include the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Commission (SEC), the National Credit Union Administration (NCUA), the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
The review is required to identify:
- Regulations, guidance, orders, and no-action letters that “unduly impede” fintech firms from entering into partnerships with federally regulated institutions, including insured depository institutions, credit unions, broker-dealers, investment advisers, and futures commission merchants.
- Items that could be amended to streamline applications by fintech firms seeking bank charters, credit union charters, deposit or share insurance, and other federal licenses, registrations, and authorizations.
Within 180 days, each regulatory agency needs to start promoting innovation based on the review’s findings, and they should work with the President’s economic advisor to do so.
This initiative is designed to promote competition in the financial sector. Currently, complicated rules and oversight tend to favor established financial companies. The goal is to simplify regulations, lower hurdles for new companies entering the market, and foster better cooperation between fintechs, traditional banks, and government regulators.
How “Fintech Firm” Is Defined
The definition of “fintech firm” in Section 2(a) is very wide-ranging. It includes any non-bank company that uses technology to provide or help with financial products or services. This covers a lot of activities, specifically: handling payments, providing loans, accepting deposits, dealing with derivatives, managing investments, offering brokerage services, underwriting and capital markets, providing custodial and fiduciary services, digital banking, services related to digital assets, securities and commodities trading, and blockchain services.
To be clear, this definition also includes financial activities specifically mentioned in sections 4(k)(4)(A) through (G) of the Bank Holding Company Act of 1956.
This new order essentially groups almost all parts of the crypto industry – including exchanges, companies that hold crypto for others, stablecoin creators, payment processors, derivatives platforms, and infrastructure providers – under one set of regulations designed to simplify things.
Why Now: The CLARITY Act Context
The order arrives at a precise moment in the broader crypto regulatory cycle.
On May 14, 2026, the Senate Banking Committee approved the Digital Asset Market Clarity Act by a vote of 15 to 9. The bill passed thanks to a last-minute agreement reached by committee members, with two Democrats joining Republicans in support. The White House is aiming for Congress to fully approve the legislation by July 4th, according to Patrick Witt, the administration’s crypto advisor, who spoke at the Consensus Miami conference earlier this month.
The CLARITY Act aims to clarify which government agency oversees digital assets. It would give the CFTC main control over immediate transactions in digital commodities, while the SEC would continue to regulate digital asset investments. President Biden’s recent executive order supports this effort by instructing agencies to begin unifying the currently scattered regulatory landscape *before* the CLARITY Act, if passed, requires them to. Essentially, CLARITY defines *who* regulates *what*, and the executive order explains *how* regulators should prepare.
This action aligns with a May 15th request from both Democrats and Republicans on the House Agriculture Committee, who asked the President to appoint all four missing members of the CFTC before the agency’s responsibilities grow under the CLARITY Act. While the order doesn’t directly address the empty commissioner positions, the resulting 90-day review of financial technology will be delivered to a CFTC that currently only has one confirmed commissioner.
What Crypto Firms Should Watch For
Three specific outcomes from the order’s implementation will define its real-world impact:
- Whether the Federal Reserve concludes that existing law permits direct payment-account access for crypto-native firms. A finding that the Fed’s authority is sufficient would dramatically reduce structural barriers for state-chartered crypto banks and stablecoin issuers. A finding that legal impediments remain would shift the question to Congress.
- Whether the OCC, FDIC, and NCUA streamline charter applications for fintech firms. A meaningful liberalization of the bank-charter, credit-union-charter, and deposit-insurance application processes could open a path for the largest crypto firms, such as Coinbase, Circle, Kraken, and others, to become directly regulated banking entities rather than working through partner banks.
- Whether SEC and CFTC supervisory practices change. The order directs both agencies to identify and amend rules that impede fintech partnerships with federally regulated institutions; language that could affect everything from no-action letter practice to enforcement priorities.
This order doesn’t change any existing rules by itself. Instead, it sets a timeline: 90 days for review, 180 days to take action, and 120 days for the Federal Reserve to assess the changes. The necessary paperwork starts now, and we expect the new regulations to be published in late summer and fall of 2026.
The Limits and the Leadership Transition at the Fed
As with all executive orders, this document includes standard clauses stating it doesn’t change existing laws, doesn’t create any legal rights, and depends on available funding. When discussing the Federal Reserve, the order uses the word “requested” instead of “directed” to acknowledge the central bank’s independence – a key part of how the government is structured that this order can’t change.
For the Federal Reserve, the recent directive feels more like a strong suggestion than a strict order. Its timing is also noteworthy, coinciding with a change in leadership. Kevin Warsh was recently confirmed as the new Chair of the Federal Reserve, replacing Jerome Powell whose term ended on May 15th. Powell will temporarily continue in a leadership role until Warsh is officially sworn in. Interestingly, Powell will remain a member of the Board of Governors after stepping down as Chair – a break from nearly 80 years of tradition – and will serve until January 2028.
The upcoming 120-day review of the Federal Reserve, as requested, will be led by a new team – it’s the first leadership change at the Fed in eight years. Decisions about whether and how the Fed responds, and what its findings will be, will be made by Chair Warsh – a Trump appointee with experience leading the central bank through the 2008 financial crisis – and not by the White House itself.
As a researcher following this closely, what’s significant about this order – regardless of what the Federal Reserve does next – is that it officially puts direct payment access for crypto firms on the federal government’s radar. It’s now a priority with a deadline set by the President. This is a big change from how things have been handled for years, where these issues were decided on a case-by-case basis in court.
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2026-05-20 08:37