This Fed Proposal Could Push DeFi TVL 10X To Over $1T In 15 Months

[Redator]

When DeFi TVL broke $1Bn in 2020, even Arthur Hayes, the co-founder of BitMEX, couldn’t help but celebrate. And rightly so. It was a milestone for a crypto subsector still taking baby steps in a finance world that is unforgiving of innovation challenging the status quo.

Five years later, not only is Wall Street looking the crypto way, but the President of the United States thinks the future is crypto and smart contracts. Donald Trump is behind World Financial Liberty, and some of his meme coins are trading on top exchanges, including Binance.

While regulations play a critical role in explaining the pump, a proper bridge between tradFi and DeFi will be massive, mainly for stablecoin issuers. Tether, Paxos, and Circle are already the big winners, minting hundreds of billions of USD-backed tokens on Solana, Ethereum, and multiple other chains, including Tron.

(Source: Coingecko)

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Skinny Master Accounts For Stablecoin Issuers?

Yesterday, positive steps were taken that will be game-changers for stablecoin issuers. During the inaugural Payments Innovation Conference, held on October 21, Governor Waller, a Federal Reserve board member, proposed the issuance of skinny master accounts for fintech players, including stablecoin issuers.

BIG NEWS out of the @federalreserve Payments Innovation Conference this morning.

Governor Chris Waller announced the central bank is proposing a new type of limited-access master account (or what he calls a “skinny master account”) for ALL legally eligible institutions to… https://t.co/lZh0I0Tj3a pic.twitter.com/Wg7ygjpvJj

— Eleanor Terrett (@EleanorTerrett) October 21, 2025

Presently, stablecoin issuers like Circle and Tether depend on third-party banks regulated by the Federal Reserve and with access to master accounts. Through these banks, stablecoin issuers can issue stablecoins from cash deposited by clients.

However, there is a problem: Their dependency only means more friction. Costs are higher, as banks charge for every transfer. Again, there are settlement risks as some processes might take days, not seconds.

Additionally, if the sponsor bank goes bankrupt, the stablecoin issuer has to deal with counterparty risks. In March 2023, USDC briefly depegged following the bankruptcy of Silicon Valley Bank (SVB).

Reliance on a third-party bank stifles innovation and slows adoption. For this reason, Governor Waller’s proposal of a skinny master account for fintechs, including stablecoin issuers, will be a move in the right direction.

While it will have limited access for eligible and non-traditional institutions, it offers direct connectivity to the Federal Reserve’s core payment rails, powering basic services like fund transfers and reserve holdings.

This translates to faster and cheaper operations for stablecoin issuers. Most importantly, Circle and top stablecoin issuers in the United States will benefit from enhanced liquidity and stability since they can hold their reserves more securely at the Fed, minimizing bank runs and counterparty risks, as seen with the SVB collapse.

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Will DeFi TVL Hit $1T in 2026?

As of October 22, all DeFi protocols manage nearly $149Bn.

Ethereum is still the king of DeFi, but hundreds of millions are tied in Solana, Binance Smart Chain (BSC), and smart contract platforms, which power some of the best cryptos to buy.

(Source: DefiLlama)

Depending on how fast stablecoin issuers get access to these skinny master accounts, DeFi as a whole will likely expand rapidly in the coming few years, even breaking the $1T mark by the end of 2026.

This growth will be powered directly by the inflow of stablecoins into the broader DeFi ecosystems.

With lower costs and cheaper processing, not only will USD stablecoins soar, also breaking the $1T during this time, but global and institutional adoption will also spike.

Here, access by platforms like Uniswap, Ripple, or Custodia to Federal Reserve rails, all without full banking privileges, lowers barriers for regulated DeFi and fast-tracks the redirection of potential trillions from TradFi to crypto rails.

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Fed Skinny Master Account, DeFi TVL To $1T?

• DeFi is disruptive to TradFi 
• Governor Waller proposes a skinny master account for fintechs 
• Stablecoin issuers like Circle and Tether will be the top beneficiaries 
• Will DeFi TVL soar 10X to over $1T? 

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