Coinbase Backs Fed Payment Accounts – Pushes For Interest On Balances, Risk-Based Oversight

• Coinbase filed comment letters this week with the Federal Reserve in favor of the central bank’s proposed payment accounts, with Chief Policy Officer Faryar Shirzad calling them “an important step towards modernizing the U.S. payment system.”
• The exchange is advocating three reforms: interest on a threshold amount of balances, overnight balance limits based on actual payment needs, and oversight commensurate with risks.
• Separately, Coinbase submitted a comment letter to the CFTC on prediction markets, which was submitted the same day as a joint Multicoin Capital–Hyperliquid Policy Center submission on the same rulemaking.

Coinbase (COIN) on Tuesday submitted comment letters to the Federal Reserve, supporting the central bank’s proposal to create “payment accounts” for crypto and fintech companies but also seeking changes that it says are necessary to make the framework workable in practice.

The exchange wants payment accounts to “work in reality” with three priorities, Coinbase Chief Policy Officer Faryar Shirzad said on X. First, the accounts should earn interest on at least some threshold level of balances. Second, any cap on overnight balances should reflect an institution’s demonstrated payment needs. 

Third, oversight should be proportionate to real risk. "Get these details right, and payment accounts can lower costs, strengthen competition, and keep the U.S. at the frontier of global payments," Shirzad wrote.

COIN stock edged 0.7% lower in midday trade on Tuesday. On Stocktwits, retail sentiment around COIN fell to ‘bearish’ from the ‘ neutral’ zone, accompanied by ‘low’ chatter levels over the past day.

What The Fed Proposed

The comment letters respond to the Federal Reserve Board’s May 20 proposal to establish a limited-purpose “payment account” that would enable eligible financial institutions to clear and settle payments directly through the central bank’s infrastructure without full master-account status. The proposal targets companies outside the traditional banking system, such as crypto and fintech companies, which currently have to send payments via intermediary correspondent banks, adding cost, time and counterparty risk.

The proposal built on a prototype detailed in a December request for information and followed President Donald Trump's May 19 executive order that told regulators to lower barriers for fintech firms to access Fed payment infrastructure. The proposal would tailor closing balance limits to each holder’s expected payment activity — the same provision Coinbase is now asking the Fed to tailor further. The comment period was 60 days from publication in the Federal Register and closed July 27.

The Federal Reserve Bank of Kansas City in March approved a limited-purpose master account for Kraken’s Wyoming-chartered banking arm, making it the first crypto firm to get direct Fed access.

A Second Letter To The CFTC

Separately, Coinbase filed a comment letter with the CFTC dated July 27 on its proposed prediction-markets rulemaking, describing the proposal as “a substantial improvement” over the existing CFTC Rule 40.11 and commending the agency for mandating separate inquiries into whether an event contract implicates an enumerated activity, and whether it is contrary to the public interest.

The filing arrived on the same comment deadline as a joint filing by Multicoin Capital and the Hyperliquid Policy Center in support of the framework — the letter that prompted Kyle Samani’s public attack on his former firm this week.

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