Kraken Financial received a limited purpose Fed master account, marking a notable milestone for crypto-TradFi integration.
Kraken Financial, the banking arm of U.S. centralized exchange Kraken, announced that it has been granted a Federal Reserve master account, giving it more direct access to the United States’ payment systems.
In a blog post published today, March 4, the firm said that the approval makes Kraken Financial the first crypto-focused bank to receive a master account from the U.S. central bank. It also marks a major milestone for the integration of crypto and traditional financial rails.
Kraken’s banking unit specifically received a limited purpose master account, approved by the Federal Reserve Bank of Kansas City, per a press release today. The Kansas City Fed said that the approval is initially for one year and “includes restrictions and limitations tailored for Kraken Financial’s business model and risk profile[.]”
Kraken Financial is state regulated, holding a Special Purpose Depository Institution (SPDI) license in Wyoming, making it able to offer both digital asset custody and fiat deposit accounts. The Fed master account connects the bank directly to the central bank’s payment infrastructure, including Fedwire, per Kraken’s announcement. The firm said it expects the move to make fiat transactions more efficient for its institutional clients.
Last month, Kraken announced that it will sponsor so-called “Trump Accounts” for every child born in Wyoming this year, via its banking arm. The parent company of the bank and the CEX, which is the second largest in the U.S. by daily trading volume, is registered in the state, which is generally known for its crypt-friendly legislation efforts.
Other crypto firms, including Ripple and crypto-focused, federally chartered bank Anchorage Digital, have applied for Fed master accounts, but have yet to receive them to date.
This article was generated with the assistance of AI workflows.
