Regulation D Payment Accounts & Interest on Reserve Balances

Current understanding

The Federal Reserve has proposed amending Regulation D to create a new ‘Payment Account’ category for balances held at Reserve Banks that would be excluded from interest on reserve balances (IORB). Reserve requirement ratios would remain at zero. The proposal has structural implications for how narrow-purpose payment entities (potentially including stablecoin issuers and other special-purpose depository institutions with Fed master accounts) are compensated for balances held at the Fed. Status: proposed rule.

Evidence log

• 2025-03-25 — Anti-CBDC Surveillance State Act: cross-connection with federal-reserve-cbdc-prohibition: S1124’s ban on Federal Reserve accounts for individuals directly intersects with Regulation D/Reg A questions about who may hold Fed master or payment accounts. (novelty: 3)
• 2026-05-26 — Regulation A: Extensions of Credit by Federal Reserve Banks: Companion Regulation A proposal would bar the same ‘Payment Account’ holders from discount window credit at Reserve Banks, reinforcing that this account class is walled off from both IORB and lender-of-last-resort access. (novelty: 2)
• 2026-05-26 — Regulation D: Reserve Requirements of Depository Institutions: cross-connection with payment-stablecoin-issuer-aml-sanctions: A new IORB-excluded ‘Payment Account’ class at Reserve Banks bears directly on whether and how Permitted Payment Stablecoin Issuers can hold reserves at the Fed, linking Regulation D reserve mechanics to the GENIUS Act stablecoin issuer regime. (novelty: 3)

Open questions

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