Coinbase advocates for interest-bearing Federal Reserve payment accounts

Coinbase has formally told the Federal Reserve that its proposed “skinny” payment accounts need a lot more meat on the bone. In a response submitted on February 5 to a Fed consultation, the exchange argued that these limited-purpose accounts should allow non-bank institutions, including crypto and fintech firms, to earn interest on their balances, not just park money in accounts that cost more to maintain than they’re worth.

What Coinbase actually wants

The Federal Reserve has been exploring limited-purpose payment accounts designed to give non-bank entities some access to its systems. Coinbase’s issue is that the current proposal strips out features that would make these accounts actually useful in practice.

Specifically, Coinbase criticized the potential prohibition on earning interest on account balances. The company called interest accrual essential for commercial viability.

Coinbase also took aim at proposed low overnight balance limits, which would further constrain how these accounts function in real-world payment operations.

The exchange’s Chief Policy Officer, Faryar Shirzad, publicly reinforced these positions around February 13, presenting what amounted to a unified corporate push for modernizing US payment structures.

The risk-based oversight argument

Coinbase argued that the Fed’s oversight framework for these accounts should focus on operational risks rather than traditional credit or liquidity risk metrics. The firm argued that for payment-focused accounts held by non-bank firms, the real danger isn’t a balance sheet blowup but things like cybersecurity failures, system outages, or compliance breakdowns.

The global competitive angle

The UK, EU, Brazil, and India all already provide some form of central bank payment system access to non-bank institutions. The implication is clear: if the Fed keeps its payment rails locked behind a bank charter, innovation will simply happen somewhere else.

The Fed did move partially in this direction, proposing limited master and payment accounts in May 2026 for crypto firms. But the proposal notably excluded both interest on balances and access to intraday credit, which are exactly the features Coinbase flagged as necessary.

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