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US settlement runs over the Fed's Fedwire Funds Service (RTGS) and CHIPS (The Clearing House); Fedwire completed its single-day ISO 20022 cutover on July 14, 2025 (CHIPS migrated April 2024). Master-account/settlement access is governed by the Federal Reserve's August 2022 Account Access Guidelines — six risk-based principles with three-tier review — with Reserve Banks retaining discretion, a key constraint for novel/fintech charters. Globally, correspondent banking continues a structural decline (~25% fewer relationships 2011-2020) driven by AML/CFT compliance costs and de-risking, concentrating access and raising costs in thinner corridors.
The access constraint is governed by the Federal Reserve's Account Access Guidelines. Master-account and settlement access is governed by the August 2022 guidelines, which set out six risk-based principles and a three-tier review, with the 12 Reserve Banks retaining discretion. Legal eligibility alone does not guarantee an account, a key constraint for novel and fintech charters. Reserve Bank discretion over master-account access is the structural chokepoint for novel and fintech charters seeking direct settlement — directly relevant to the kind of direct-access ambition implied by Stripe's MALPB charter. This is the heart of the bank versus non-bank access asymmetry: even a chartered non-bank entity does not obtain settlement access by right.
Global correspondent banking is in structural decline. Active correspondent banks declined roughly 25% between 2011 and 2020 — around 4% in 2020 alone — while payment volumes rose, driven by AML/CFT compliance costs and de-risking. The BIS noted in November 2025 that sustained decline plus greater concentration is raising transaction costs in thinner corridors. This is principally a bank PSP phenomenon, but the resulting cost and de-risking exposure creates a structural opening for non-bank and stablecoin rails.
Outlook
The Fedwire ISO 20022 cutover is complete and is now established standing knowledge, as is the November 2025 end of SWIFT MT/MX coexistence. The Federal Reserve Account Access Guidelines remain the durable framework governing settlement access, with Reserve Bank discretion as the persistent constraint on novel charters. The correspondent-banking structural decline is a continuing trajectory that, combined with concentration, sustains the opening for alternative rails. The module's trajectory is established.
Correspondent Banking, Settlement & Access
This module's analytical spine is the structural asymmetry between bank and non-bank access to core settlement infrastructure. The Fedwire Funds Service completed a single-day ISO 20022 cutover on July 14, 2025 — rescheduled from an initially planned March 10, 2025 date — discontinuing the proprietary FAIM messaging format. This followed CHIPS' own ISO 20022 migration in April 2024, and the November 2025 end of SWIFT MT/MX coexistence, which together make ISO 20022 the global standard for cross-border payment messaging. Access to that settlement infrastructure, however, remains discretionary rather than automatic: the Federal Reserve's Account Access Guidelines, adopted in August 2022, set out six risk-based principles and a three-tier review process for master-account and settlement access, but the twelve Reserve Banks retain discretion over individual applications — legal eligibility alone does not guarantee an account. This discretion is the key structural constraint facing novel and fintech charter types, including MALPB-chartered entities of the kind Stripe now holds, in pursuing direct central-bank settlement access.
Beneath this bank/non-bank access asymmetry, correspondent banking itself is in structural decline. The number of active correspondent banks fell approximately 25% between 2011 and 2020, including a roughly 4% decline in 2020 alone, even as payment volumes continued to rise over the same period — a divergence driven by AML/CFT compliance costs and de-risking behaviour. The BIS, in a November 2025 speech, noted that this sustained decline, combined with growing concentration among the remaining correspondent banks, is raising transaction costs in thinner corridors, creating a structural opening for non-bank and stablecoin-based settlement rails to compete for cross-border volume that correspondent banks are exiting.
Outlook
The bank/non-bank settlement-access asymmetry — Reserve Bank discretion over master accounts on one side, and continuing correspondent-banking concentration and decline on the other — is likely to remain the central structural theme of this module through 2026, with novel-charter entities such as MALPB holders serving as the test case for how much that asymmetry can be narrowed without statutory change.
1 further periodic run re-emitted the standing brief unchanged and is not shown.
Sources and findings (4)
- T1Federal Reserve Financial Services / PCBB — The Federal Reserve adopted ISO 20022 for the Fedwire Funds Service in a single-day implementation on July 14, 2025 (rescheduled from March 10, 2025), discontinuing the proprietary FAIM format; CHIPS migrated in April 2024.
- T1St. Louis Fed — In August 2022 the Federal Reserve Board finalised Account Access Guidelines for master-account and payment-service requests, grounded in six risk-based principles with applicants tiered into three review categories; the decision rests with the 12 Reserve Banks, and legal eligibility alone does not guarantee an account.
- T1IMF Note 2025/002 / Congress.gov CRS — The number of active correspondent banks declined ~25% between 2011 and 2020 (about 4% in 2020 alone) while payment volumes rose, driven by stricter AML/CFT rules and de-risking — increasing concentration and transaction costs in countries with limited access.
- T1BIS speech sp251127a / Finextra — BIS (November 2025) notes a sustained decline in correspondent banking across all regions combined with greater concentration, contributing to rent-seeking and higher transaction costs; the SWIFT MT/MX coexistence period ended November 2025, making ISO 20022 the global cross-border standard.