FedNow Sparks Controversy as Fintech and Crypto Firms Sue Over Exclusion

Fintech, crypto, and other innovative financial startups are facing delays and rejections in their applications for "master accounts" from the Federal Reserve, which would grant them direct access to the Fed's new instant payment system, FedNow, and other services. The launch of FedNow has raised the stakes in the battle for access, as these startups fear that without direct access, their innovation could be stifled or they would have to rely on traditional banks and share transaction fees. The Federal Reserve has published guidelines for reviewing master account applications, but some applicants argue that the guidelines are subjective and lack clarity. Several rejected applicants have already sued, challenging the legality of their rejections. The outcome of this battle will have significant implications for the future of fintech and crypto firms in the US.