Kraken, the second-largest cryptocurrency exchange in the US, has reportedly secured access to the Federal Reserve Board’s (Fed) core payment systems, marking a milestone as the first cryptocurrency company to operate on the same infrastructure used by thousands of banks and credit unions.
Kraken has achieved a major victory in the cryptocurrency industry
On Wednesday, Kraken Financial, the banking arm of Kraken, became the first cryptocurrency company to have direct access to the Federal Reserve’s primary payment system after winning approval from the Federal Reserve Bank of Kansas City for a Fed master account, The Wall Street Journal (WSJ) first reported.
According to Wednesday’s report, the Kraken unit, which holds a private Wyoming state banking charter designed specifically for cryptocurrency companies, does not receive the full range of services available to banks, such as interest payments on reserves held at the central bank.
However, this achievement represents a major victory for the cryptocurrency industry, which has been repeatedly denied access to the Federal Reserve System for years. The company previously relied on intermediary banks to facilitate transfers to other companies.
The Fed’s approval of the master account will allow Kraken Financial to “handle transactions more quickly and smoothly for large clients and professional traders,” the company told the Wall Street Journal. Furthermore, Kraken’s banking unit will give direct access to Fedwire, a major interbank payment system that processes more than $4 trillion in transfers daily.
Direct access to the Fed’s payment paths “improves the reliability and efficiency of moving fiat deposits in and out of digital asset markets,” Kraken co-CEO Arjun Sethi told the Wall Street Journal.
Meanwhile, Kansas City Fed President Jeff Schmid highlighted the continued evolution of the payments landscape in the statement cited by Reuters. “Throughout this transformation, the safety and stability of the US payments system remains our top priority,” he stressed.
Kraken Financial’s main account has been approved for an initial term of one year, news media reported.
Banks are pushing back on cryptocurrency company access to the Fed’s bars
The Kraken unit’s limited access to the master account is similar to the “skinny” master account concept first proposed by the Federal Reserve Board of Governors in October 2025.
The proposal would allow financial payment companies and cryptocurrency companies to access the Fed’s payment pathways, but would exclude other benefits that are more aligned with banks, including the discount window’s lending facilities.
This has raised major concerns among traditional banks, which have joined in their opposition to granting cryptocurrency and fintech companies direct access to the Fed’s payment systems, warning that even limited access could pose a significant threat to the US payments system and overall financial stability.
In a joint letter, the Banking Policy Institute (BPI), the Clearing House Association (TCHPA) and the Financial Services Forum (FSF) called for a 12-month waiting period before businesses can apply for accounts payable. The banking groups argued that the Fed “should block access until newly licensed stablecoin issuers prove they can operate safely.”
Meanwhile, the American Bankers Association (ABA) asked the Office of the Comptroller of the Currency (OCC) last month to postpone its approval of applications for cryptocurrency bank charters, suggesting that the agency should wait until regulatory uncertainties are resolved.
In December, the OCC approved conditional banking charters for Ripple, Circle, BitGo, Paxos, and Fidelity. The approval has raised concerns that it could blur the lines between banking activities and lead to regulatory arbitrage.
The banking lobby has raised concerns about the uncertainty surrounding emerging business models, the need for increased transparency in charter enforcement and decision-making processes, and the lack of definitive federal oversight.
Ultimately, the American Bar Association proposed delaying the review process until Congress completes the rules that will ultimately govern many new OCC applicants.
The total crypto market capitalization is at $2.39 trillion in the one-week chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, chart from TradingView.com
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