For the first time in American financial history, a cryptocurrency company has walked through the front door of the Federal Reserve. Kraken Financial, the Wyoming-chartered banking arm of cryptocurrency exchange Kraken, has secured a Federal Reserve master account. This makes Kraken Financial the first digital asset bank (or crypto-focused/digital asset firm) in the U.S. to gain direct access to the Federal Reserve’s core payment infrastructure, allowing settlement in central bank money without relying on intermediary/correspondent banks.
The Federal Reserve Bank of Kansas City oversaw and approved the application after more than five years of regulatory back-and-forth between the company and the U.S. and state supervisors.
The master account plugs Kraken Financial directly into Fedwire, the interbank payment network that moves trillions of dollars daily across the U.S. financial system. Until now, Kraken routed all dollar transactions through partner banks—a workaround that added cost, delay, and operational risk. That middleman arrangement is now history.
A New Chapter for Crypto Banking
Kraken Financial runs as a Wyoming Special Purpose Depository Institution, a state-regulated bank built on a full-reserve model. It holds liquid assets matching or exceeding 100% of all client fiat deposits. This is a conservative stance that gave regulators enough confidence to grant access to other crypto firms that have long chased but never secured it.
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Arjun Sethi, co-CEO of Kraken, framed the moment as the point where crypto infrastructure stops orbiting the traditional financial system and starts operating inside it. Direct Fed access, he argued, lays the groundwork for same-time settlement between fiat and crypto, institutional cash management tied to digital asset custody, and regulated financial products that currently exist only on paper.
The rollout starts narrow—first serving institutional clients at Kraken before folding into Payward’s wider infrastructure over time. The approval does come with guardrails. Kraken cannot earn interest on reserves or tap emergency Fed lending, privileges that remain off-limits to non-traditional banks.
Senator Cynthia Lummis called it a watershed moment, saying the Fed had confirmed what crypto advocates had argued for years: digital asset firms can manage risk as rigorously as any traditional lender. Wyoming Governor Mark Gordon welcomed it as proof that the state’s crypto banking laws carry real weight.
