The good folks at the Bank Policy Institute and The Clearing House—fresh off their battle against stablecoin yield—have a new paper out explaining why they oppose progress and how the economy exists to serve banks, not the other way around. I'm only kidding (sort of). What they actually put out is a 50 page response to the Fed's proposed rules around the so-called "skinny master accounts" that would give non-banks like FinTechs and stablecoin issuers access to certain Fed-run payment systems for the first time. Needless to say, they are not fans! By way of background, most other central banks give access to non-banks and have been doing so for years. FinTech integration is a key part of the success of Pix in Brazil and UPI in India. Restricting access to the bank monopoly is one reason why payments in America suck. The BPI/TCH arguments against this sort of account (and for making it very limited if introduced) all rest around safety and soundness. The way they tell it, fractional-reserve banking is a bastion of economic stability. It's those pesky FinTechs and stablecoin issuers that are dangerous. Also, banks never faciliate any kind of illicit activity. Think I'm kidding? Here are some quotes on the consequences of giving FinTechs and stablecoin issuers equal access: ..it would allow uninsured institutions subject to less rigorous supervision and regulation to access directly the payments system, which could undermine the integrity of the payments system and pose risks to financial stability. ...the shift would enable these more lightly regulated institutions to attract additional customers, thereby increasing the number of consumers exposed to the risks inherent to maintaining accounts at such institutions. These risks include the heightened potential for runs arising from uninsured deposit taking and other deposit-like activities, such as stablecoin issuance.. ...the shift could have significant spillover effects on the broader economy. For example, if the proposed approach contributes to increased stablecoin issuance and adoption, stablecoins could displace deposits at IDIs. ..the shift could also increase illicit finance risk as less regulated (or unregulated) institutions. The disingenuous nature of these arguments is almost impressive. Narrow banks like FinTechs and stablecoin issuers don't have deposit insurance because they don't need to, they literally have the money. Banks don't. That's why they need deposit insurance. It's also why they blow up periodically and have needed trillions in taxpayer funded bailouts in my lifetime alone. We are only 3 years removed from a GSIB collapsing, for gods sake. Banks are also the primary conduits of trillions of dollars in illicit funds annually. Not a year goes by without a billion-dollar fine for AML violations. But they still want exclusive access to public government infrastructure, because they care about us! (but not enough to pay any interest on our bank accounts, even though the Fed pays them 3.6% for doing nothing). I fully support the new limited master account regime because it's good for progress, good for consumers and businesses, and will lead to a better and safer financial system.