Blockchain Association Pushes Fed to Revise Payment Account Proposal

The Digital Chamber ("TDC"), a blockchain and digital asset trade association, urged the Federal Reserve to modify its proposed "Payment Account" framework by removing balance caps and expanding access to key services. (See prior coverage.)

In a comment letter responding to a Federal Reserve Request for Information, TDC contended that the prototype is consistent with the Board’s Account Access Guidelines and would promote responsible innovation. The association argued that the framework would allow "payment-focused institutions to access Federal Reserve infrastructure" under appropriate supervision without forcing them into traditional banking models that are not designed for their business structures.

TDC raised concern about the proposed overnight balance cap, set at the lesser of $500 million or 10% of total assets. According to the association, the cap would weaken the account’s core function as a secure source of funding by requiring institutions to sweep excess funds to correspondent banks overnight. That practice, TDC argued, would reintroduce the very "credit and operational risks the Payment Account" is intended to reduce. The association further maintained that if balances are necessary to support daytime settlement activity, that need does not disappear after market hours, and it recommended replacing fixed caps with activity-based limits and enhanced supervisory monitoring.

TDC also objected to the exclusion of FedACH services, emphasizing the system’s scale and importance to U.S. payments infrastructure. Without FedACH access, the association argued, the accounts would not fulfill their stated purpose and institutions would remain dependent on correspondent banking arrangements. Although acknowledging the Fed’s concerns about daylight overdraft risk, TDC urged the Board to adopt technical safeguards that would permit access or to commit to developing workable solutions within a defined timeframe.