Kraken's banking arm becomes first crypto firm to secure payments account with Fed

Cryptocurrency exchange Kraken's banking unit has gained access to the Federal Reserve's payments system through a limited-purpose account, the first US digital-asset bank to do so as the sector deepens its reach into mainstream finance.

Through its Fed master account, Kraken Financial can link directly to ‌core US ⁠payment ⁠systems such as Fedwire, avoiding intermediary banks and enabling faster, more efficient fiat transfers for ​institutional clients, while reducing operational complexity and costs, the company said in a ​blog post on Wednesday.

While Kraken would not receive the wider range of privileges granted to banking institutions with a full master account, the move is still a major win for the ⁠digital-assets industry ‌as they are increasingly incorporated into traditional markets and attracting more interest from institutional investors.


Digital-asset companies have also benefited ⁠under President Donald Trump, who has promised to make America the "crypto capital of the world."

"As we know, the ​payments landscape is actively evolving," Kansas City Fed President Jeff Schmid said in a statement. "Throughout this transformation, the integrity and stability of the US payments system remain our priority."

The account was approved for an initial one-year term, with services to be introduced in phases, ‌starting with the support for institutional client activity at Kraken.

"This milestone marks the convergence of crypto infrastructure and sovereign ​financial rails. ​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," said Arjun ​Sethi, Co-CEO of Payward and Kraken.

Kraken Financial is the company's Wyoming-chartered bank and Payward is the legal parent.

Kraken was valued at $20 billion in its latest fundraising in November, and has been actively investing to expand into various asset classes and grow its user base.