Crypto researcher SMQKE highlights a critical development in the evolving landscape of U.S. payment systems, focusing on how Ripple gains indirect access to Federal Reserve Master Accounts. In a detailed breakdown, SMQKE explains how Ripple, a fintech company that does not qualify for direct access to these accounts, leverages its partnership with core banking provider Finastra to integrate into the FedNow Service. HOW RIPPLE GAINS INDIRECT ACCESS TO FED MASTER ACCOUNTS VIA FEDNOW AND FINASTRA A Federal Reserve Master Account provides direct access to settle payments in central bank money through Fed systems like Fedwire and FedNow. These accounts are extremely hard to obtain,… pic.twitter.com/6ZbwDc0v3F — SMQKE (@SMQKEDQG) May 15, 2025 Understanding the Federal Reserve Master Account Limitation Federal Reserve Master Accounts are central to the U.S. payment infrastructure, enabling institutions to settle transactions in central bank money through systems such as Fedwire and FedNow. These accounts are tightly regulated and reserved exclusively for licensed depository institutions. Fintech firms, including Ripple, are not eligible for direct access due to regulatory requirements, making indirect access the only viable route for participation in central bank settlement. Finastra’s Integration with FedNow and Role as a Bridge According to SMQKE, Ripple circumvents the Master Account restriction through its strategic partnership with Finastra, a leading provider of core banking technology. Finastra is integrated with the FedNow Service and serves as an intermediary between private payment services and the Federal Reserve’s settlement infrastructure. The diagram shared by SMQKE shows Finastra Total Messaging facilitating connections between Ripple, Mastercard, and Thunes, enabling routing of payment messages across compliant channels. We are on twitter, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) July 15, 2023 Liquidity Management Tool as the Key Enabler A central element of this structure is the FedNow Liquidity Management Tool (LMT). This tool allows for the transfer of funds between Federal Reserve Master Accounts and joint accounts that support private sector payment services. As SMQKE points out, this feature allows Ripple’s payment flows to settle through banks that do have Master Accounts, even though Ripple itself does not. The LMT enables service providers authorized by FedNow participants to initiate liquidity transfers. This mechanism makes it possible for firms like Ripple to participate in real-time settlement via banks that maintain direct access, effectively embedding their services into the central bank system without violating regulatory boundaries. Interoperability through ISO 20022 Standards FedNow’s support for ISO 20022 messaging is another key factor emphasized by SMQKE. This global standard ensures that structured data can move seamlessly across compliant financial platforms. Because Ripple’s infrastructure is ISO 20022 compatible , its XRP-based payment systems are interoperable with FedNow’s real-time messaging requirements. This compatibility supports seamless integration of blockchain-based payments into the traditional banking system. SMQKE’s analysis underscores the significance of Ripple’s positioning within this ecosystem. By aligning with Finastra and utilizing the FedNow LMT, Ripple participates in settlement processes using central bank reserves, despite lacking direct Federal Reserve access This model enhances Ripple’s reach in the U.S. payments space and illustrates how private fintech firms can legally and technically integrate with sovereign financial infrastructures through strategic partnerships and regulatory-compliant frameworks. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. Follow us on X , Facebook , Telegram , and Google News The post How Ripple Gains Indirect Access to FED Master Accounts via FedNow and Finastra appeared first on Times Tabloid .
