The US Federal Reserve Board reportedly revealed details of its finalization for the guidelines dedicated to the factors, where reserve banks have to consider upon reviewing requests for Federal Reserve accounts and payment services. 

Specifically, the freshly finalized guidelines reportedly form a three-tiered review framework with the level of due diligence to be provided, based on the applicant’s risk level. 

The initial proposal for the guidelines was May last year, with a supplemental proposal rolled out in March 2022, and the final guidelines, which come into force after their publication in The Federal Register, are “substantially similar” to them. 

“Institutions that engage in novel activities and for which authorities are still developing appropriate supervisory and regulatory frameworks would undergo a more extensive review.”

Nevertheless, should the development carries on, the framework was streamlined “to provide more comparable treatment between non-federally-insured institutions chartered under state and federal law.” 

Non-federally-insured entities that are chartered within the scope of federal legislations but do not possess a holding firm subject to Federal Reserve supervision will be have to face to the highest level of stringent review. 

Financial institutions need a Federal Reserve account to tap into the international payment networks.

The Fed’s slow approach to giving out greenlights to crypto banks to tap into Federal Reserve accounts, which are normally known as “master accounts,” has been viewed as a hackle throughout crypto bankers. 

Wyoming reportedly rolled out regulations to enable “blockchain banks” in 2019. In June, Wyoming-headquartered digital asset Custodia Bank brought the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City to court over accusations related to the 19 months it had been waiting to receive a master account crossing the legally set limits on response time.