Fed master account gives Kraken Financial direct access to U.S. payment rails without intermediary banks.
Kraken has reached a major regulatory milestone in the United States. Its banking unit, Kraken Financial, has received a Federal Reserve master account. Approval gives the firm direct access to the U.S. central bank’s payment infrastructure. The development links digital asset services with core banking rails for the first time.
Kraken Becomes First Crypto Bank With Direct Access to Federal Reserve Payment Infrastructure
Crypto trading platform Kraken has secured a Federal Reserve master account, giving its banking unit direct access to the central bank’s core payment infrastructure. The move places the crypto firm on the same payment rails used by traditional financial institutions.
According to a company release, Kraken’s banking arm, Kraken Financial, received approval for the account. The authorization allows the firm to connect directly to Fedwire, a key U.S. interbank payment network that processes trillions of dollars in transfers each day.
Access to a master account means Kraken Financial can move funds through the Federal Reserve system without relying on intermediary banks. Before this, crypto companies had to rely on traditional banks to process fiat payments.
With this approval, Kraken Financial can access the system directly, just like regular banks do. Institutional clients could benefit from faster payment processing and fewer banking dependencies when moving funds.
Arjun Sethi, Co-CEO of Payward and Kraken, described the move as a turning point for crypto infrastructure.
“With a Federal Reserve master account, we can operate not as a peripheral participant in the U.S. banking system, but as a directly connected financial institution.”
Sethi said.
He added that the SPDI structure provides a stable base for regulated digital asset services. Direct settlement through Fedwire reduces reliance on correspondent banks and integrates fiat liquidity into digital markets.
Approval Clears Way for Next Phase of Crypto Banking Services
Kraken says this new setup could support more financial services in the future. One idea is atomic settlement, where crypto and regular money (fiat) are exchanged instantly in one transaction. This would reduce delays and lower settlement risk.
The platform also plans to build tools that help institutions manage their cash while storing digital assets on the platform. Other financial products could be created within a regulated banking structure.
Rollout of the new capabilities will happen step by step. At first, the new payment access will mainly serve institutional clients trading on Kraken. Later, the payment features will expand across Payward’s broader financial infrastructure, including Kraken’s services.
Approval from the Federal Reserve did not happen quickly. Kraken spent more than five years working with regulators to reach this stage. During that time, authorities closely reviewed the bank’s operations, governance structure, and risk management systems before granting approval.
Wyoming regulators played a central role in the process. The SPDI banking model was designed specifically for digital asset institutions seeking regulatory clarity.
Kraken Financial continues to work with both the Federal Reserve and Wyoming authorities. Future payment features will expand gradually as regulatory coordination continues.
