Coinbase, the largest U.S. cryptocurrency exchange, has launched a major advocacy campaign urging the Federal Reserve to grant crypto firms direct access to payment rail systems. The proposed special-purpose account model would enable cryptocurrency companies to process payments more efficiently, potentially revolutionizing how crypto integrates with traditional financial infrastructure.
In a formal submission to the Federal Reserve, Coinbase argued that current restrictions create an uneven playing field that disadvantages innovative crypto companies while protecting legacy financial institutions. The exchange is calling for a limited pilot program that would allow select crypto firms to access Federal Reserve payment services.
Breaking Down the Proposal
The special-purpose account model proposed by Coinbase would operate under strict regulatory oversight while providing several key benefits:
Direct Settlement Access:
Crypto firms could settle transactions directly through Federal Reserve systems, reducing reliance on intermediary banks and potentially lowering costs.
24/7 Payment Capability:
Unlike traditional banking hours, crypto-based payment rails could operate around the clock, matching the always-on nature of cryptocurrency markets.
Improved Efficiency:
Direct access could reduce transaction times from days to seconds for certain types of payments.
Level Playing Field:
The proposal aims to give crypto companies the same payment access currently enjoyed by traditional banks and financial institutions.
Industry Implications
If approved, the special-purpose account model could accelerate mainstream cryptocurrency adoption by making crypto-based payments more practical for everyday use. Currently, converting between crypto and fiat currency for payments involves multiple steps and delays that limit utility.
“This is about financial infrastructure modernization,” said Coinbase’s Chief Policy Officer. “Crypto companies should have the same access to payment systems that traditional banks enjoy. Our customers deserve faster, cheaper, and more efficient payment options.”