Crypto took a step toward deeper integration with the U.S. financial system after Kraken secured access to the Federal Reserve’s core payment infrastructure, becoming the first crypto-native firm to operate on the same rails as traditional banks and credit unions.
Kraken’s banking arm, Kraken Financial, received approval for a so-called master account from the Federal Reserve Bank of Kansas City, according to company statements.
The account grants direct entry into the Fed’s payment systems, including Fedwire, a real-time gross settlement network that processes trillions of dollars in transfers each day.
The approval allows Kraken Financial to settle dollar payments without routing transactions through intermediary banks.
Until now, the exchange relied on partner institutions to send and receive U.S. dollars. Direct access allows the firm to move funds across the same infrastructure used by thousands of regulated financial institutions.
Kraken’s ‘breakthrough’ for crypto
Kraken said the master account will allow it to handle transactions with greater efficiency for large customers.
The company will not receive the full suite of services available to traditional banks. It will not earn interest on reserves held at the central bank and will not have access to the Federal Reserve’s lending facilities.
Even with those limits, the decision marks a breakthrough for an industry that has faced repeated denials in its efforts to connect to the Fed’s payment backbone.
Sen. Cynthia Lummis, a Republican from Wyoming and a long-standing advocate for digital assets, called the approval a “watershed milestone in the history of digital assets.”
Wyoming has positioned itself as a hub for crypto-focused financial charters, including special-purpose institutions designed to bridge blockchain markets and the banking system.
Other crypto firms remain in line for similar access. Ripple and Custodia Bank have sought master accounts from the Federal Reserve. Custodia’s earlier application was denied after a legal battle that affirmed the Fed’s discretion in granting access.
Industry participants view Kraken’s approval as a signal that the central bank may be open to limited pathways for crypto institutions under defined structures.
The move aligns with discussions inside the Federal Reserve about so-called “skinny” master accounts, a concept that would grant access to payment rails without extending the full benefits of bank status.
Under such a framework, crypto firms could connect to settlement systems while remaining outside certain capital and reserve regimes applied to depository institutions.
Kraken’s milestone also arrives as the company prepares for a potential public listing. Its parent company, Payward Inc., has filed a confidential draft registration statement with the Securities and Exchange Commission as part of its IPO planning.
Public market access would place Kraken alongside other digital asset firms that have sought to bridge crypto markets and traditional finance.
