In a milestone moment for the cryptocurrency industry, Kraken Financial, the Wyoming-chartered banking arm of the U.S. cryptocurrency exchange Kraken, has been granted a Federal Reserve master account, marking the first time a digital asset-focused institution has secured direct access to the Federal Reserve’s core payments system.
The approval, issued by the Federal Reserve Bank of Kansas City, allows Kraken Financial to connect directly to the central bank’s payment infrastructure, including Fedwire, the same payment rail used by thousands of traditional banks and credit unions. This enables Kraken to send and settle U.S. dollar transactions without relying on intermediary correspondent banks, increasing speed and efficiency for institutional clients.
The account is currently classified as a limited-purpose master account, meaning Kraken Financial does not yet have all privileges granted to full depository institutions (such as earning interest on reserves or access to certain lending facilities), but the access still represents a major regulatory breakthrough for a crypto-linked institution.
Arjun Sethi, Co-CEO of Kraken and parent company Payward, said in the company announcement that the development “marks the convergence of crypto infrastructure and sovereign financial rails,” adding that direct Fed access positions Kraken as a directly connected financial institution within the U.S. banking architecture.
This move is a significant advancement in integrating digital assets with traditional financial systems, even as discussions continue about regulatory frameworks and appropriate oversight for firms with direct Federal Reserve access.
We have earlier reported that Kraken exchange has confidentially filed a draft registration statement in preparation for a U.S. initial public offering (IPO), right upon a $800 million dual-tranche funding round.
