Kraken Financial Gains Limited Federal Reserve Master Account Access via Kansas City Fed

Kraken Financial, the Wyoming-chartered banking subsidiary of crypto exchange Kraken, has secured a limited-purpose master account with the Federal Reserve Bank of Kansas City, becoming the first crypto-native firm with direct connectivity to the U.S. central bank's core payment system, the Kansas City Fed said. The one-year approval allows Kraken Financial to process fiat deposits and withdrawals linked to digital-asset markets through the Fed's payment rails rather than correspondent banks, while remaining under ongoing supervision by the Kansas City Fed and Wyoming regulators and classified as a Tier 3 entity under the Fed's account access framework. Kansas City Fed officials said the decision followed an assessment of Kraken Financial's business model and risk profile under the Federal Reserve's Account Access Guidelines, a cautious approach that contrasts with the Fed's 2023 denial of a similar application from Wyoming-based Custodia Bank. Kraken co-CEO Arjun Sethi told the Wall Street Journal that direct access should enhance the reliability and efficiency of fiat settlement for digital-asset trading and represents a significant milestone for both the company and the broader crypto industry.