Crypto: Kraken Wins Kansas City Fed Approval For Limited Master Account Access

In a first for crypto, Kraken’s banking unit gained access to the US Federal Reserve’s payment system, Fedwire, though without full banking privileges such as interest on reserves.

US cryptocurrency exchange Kraken’s banking unit has been granted a limited-purpose master account by the US Federal Reserve Bank of Kansas City, giving it direct access to the Fed’s core payments system in a first for the crypto industry.

Kraken Financial, the exchange’s banking unit, has gained access to the Fed’s payment system, Fedwire, allowing it to move money on the same rails used by banks and credit unions, according to an announcement on Wednesday.

The Federal Reserve Bank of Kansas City approved a limited-purpose account for Wyoming-based Payward Financial as a “Tier 3 entity,” according to a statement by the bank.

“With a Federal Reserve master account, we can operate not as a peripheral participant in the US banking system, but as a directly connected financial institution,” Kraken co-CEO Arjun Sethi said. The approval gives the exchange the ability to settle directly on Fedwire, reduce dependency on correspondent banks and integrate fiat liquidity into crypto, he added.

The news marks a milestone for the crypto industry in the US, though the approval does not provide the full range of services available to banks, including payment of interest on reserves held at the central bank.

Related: Ripple expands stablecoin payments stack for banks, fintechs

Several crypto companies in the US have been pursuing a master account with the Fed for years, with Caitlin Long’s Custodia Bank doubling down on efforts to obtain one through a court petition in late 2025.

The decision marks a “historic shift” for the crypto industry in the US, journalist Eleanor Terrett wrote in an X post, highlighting that it signals a softer tone at the Fed, which critics had previously described as hostile to crypto under the prior administration.

“The decision also impliedly recognizes that the Fed believes Kraken has sufficient anti-money laundering and sanctions compliance practices to curb illicit finance risk, and that Wyoming’s regulatory framework for special purpose depository institutions is in line with Federal banking standards,” Terrett said.

Source: CoinTelegraph