Coinbase assesses that the Payment Account proposal will provide fintech and crypto companies with direct access to the Federal Reserve's payment infrastructure without needing to hold a full commercial bank license. This access allows them to connect directly to the main payment systems, without relying on intermediary banks.
Currently, the majority of crypto companies still use partner banks—generally those insured by the FDIC—to settle US dollar transactions. This reliance adds costs, slows down processes, and increases third-party risks.
Coinbase states that reducing the role of intermediaries will make payment services safer and more efficient, while also lowering costs and supporting the growth of new payment providers. Coinbase's Chief Policy Officer, Faryar Shirzad, added that a similar access model has been implemented in the UK, the European Union, Brazil, and India, resulting in increased competition and reduced settlement risks.
However, Coinbase warns that the current Federal Reserve proposal could be ineffective because it is considered too restrictive. The company criticizes several provisions, such as the absence of interest on end-of-day balances and the low overnight balance limit, which are deemed to diminish benefits for large-scale institutions.
Coinbase also assesses that the balance sheet-based approach is less appropriate, as the main risks in payment services are operational, not credit, market, or liquidity. Additionally, the company requests that institutions be allowed to hold customer funds on an omnibus basis to enhance transaction settlement efficiency.
Through a push for a simpler and commercially viable framework, Coinbase reaffirms its position as an industry player that seeks to integrate more deeply into the mainstream financial system.
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