“The Narrow Bank” with secure accounts denied by FED
James McAndrews, a former US Federal Reserve (FED) employee, has founded TNB Bank (The Narrow Bank). The idea behind it: All customer funds are deposited as a reserve directly with the FED. Thus, firstly they are secured against bankruptcy and secondly, the interest on FED bank reserves (1,95%) is currently much higher than market rates. This would allow customers high interest rates despite a risk-free investment of their money. The concept would indirectly allow for safe depositing of money in a style similar to “digital cash” but unfortunately, the banks business model is focusing on big financial institutions (making the playground even more uneven).
However, so far the FED refused to grant the TNB bank access to its payment system.
Some articles on the matter: