Kraken Financial Secures Federal Reserve Master Account, First Crypto Firm With Direct Access to Core Payment System

Kraken Financial received Federal Reserve approval for a master account, becoming the first cryptocurrency company with direct access to the Fed's core payment system and channels used by thousands of banks and credit unions, the Wall Street Journal reports. The account enables Kraken Financial to connect directly to Fedwire, which processes over $4 trillion in interbank transactions daily, eliminating its reliance on intermediary banks for fund transfers. The Federal Reserve Bank of Kansas City announced the approval on Wednesday following a review, granting limited master account access under Kraken Financial's Wyoming specialized bank charter for crypto companies, excluding services such as earning interest on reserves. Kraken Co-CEO Arjun Sethi said the decision will improve reliability and efficiency of fiat deposits and withdrawals to and from the digital asset market, while Bank Policy Institute Co-Head of Regulatory Affairs Paige Pidano Paridon criticized the move as lacking transparency in approval process and risk controls, and the WSJ noted Kraken completed a funding round at a $20 billion valuation last November and has filed IPO plans.