Fintechs Are Edging Closer to Banking’s Big Payments Privilege

In a potentially far-reaching shift, the Federal Reserve is weighing whether to redraw the perimeter of the US financial system. A proposal under consideration would grant fintech giants like Circle Internet Group Inc. and Stripe Inc. a form of direct access to the central bank’s core payment infrastructure — a privilege historically reserved for banks.

Fed Governor Christopher Waller has asked staff to explore a model for so-called “skinny” master accounts available to legally eligible entities: stripped-down versions of the accounts banks use to move trillions through Fed systems daily. These accounts would exclude access to interest, overdraft privileges and ...