The approval gives Kraken the ability to bridge the gap between traditional banking and cryptocurrency
US cryptocurrency exchange Kraken has become the first crypto company to gain a Federal Reserve master account through its banking unit, Kraken Financial. The account, approved by the Federal Reserve Bank of Kansas City, provides the exchange with direct access to the Fed’s core payment system, Fedwire. This allows Kraken to move funds using the same infrastructure as traditional banks and credit unions.
Kraken co-CEO Arjun Sethi emphasized that the master account enables the company to operate as a directly connected financial institution rather than relying on intermediary banks. This access reduces dependence on correspondent banks and streamlines the integration of fiat liquidity into the crypto ecosystem.
The approval is limited in scope and does not grant all services available to traditional banks, such as interest payments on reserves held at the Fed. The Kansas City Fed designated Kraken Financial as a “Tier 3 entity” under a one-year term. The account includes restrictions and limitations designed to match Kraken’s business model and risk profile.
The move has been described as a historic shift for the US crypto sector. It signals a softer approach from the Federal Reserve toward digital assets, recognizing Kraken’s compliance with anti-money laundering and sanctions regulations. Wyoming’s regulatory framework for special purpose depository institutions was also noted as aligned with federal banking standards.
Other US crypto companies, including Caitlin Long’s Custodia Bank, have sought Fed master accounts for years, highlighting the difficulty of obtaining direct central bank access. The “skinny” master account model, proposed by the Fed’s Board of Governors in late 2025, is designed to tailor services based on risk, and Kraken’s account appears to follow this concept.
Senator Cynthia Lummis called the approval a watershed moment for digital assets, marking a new chapter in the integration of crypto into traditional financial infrastructure. Analysts say the milestone could influence regulatory attitudes and set a precedent for other crypto firms seeking similar access in the United States.
