Kraken Gets Bank Access

Kraken Financial won a Federal Reserve master account on March 4, giving the Wyoming digital-asset bank direct access to United States payment rails for the first time. (kansascityfed.org) The approval came from the Federal Reserve Bank of Kansas City and applies to Payward Financial, doing business as Kraken Financial, a Wyoming Special Purpose Depository Institution. The account is limited-purpose, lasts one year initially, and includes restrictions tied to Kraken’s risk profile. (kansascityfed.org) A master account lets an institution connect to the Federal Reserve’s payment infrastructure instead of routing dollar transfers through another bank. Banking Dive reported Kraken can now move money on the same rails used by banks and credit unions, including direct settlement on Fedwire. (bankingdive.com) Kraken said the account will reduce its dependence on correspondent banks and speed deposits and withdrawals for institutional clients. The company’s March 4 statement called it the first digital-asset bank in United States history to gain direct access to the Federal Reserve’s payment infrastructure. (blog.kraken.com) The decision lands after years of fights over whether crypto-focused firms should be allowed onto central-bank payment rails at all. Senator Cynthia Lummis said the approval came after five and a half years, underscoring how long Wyoming’s Special Purpose Depository Institution model has been waiting for a test case. (lummis.senate.gov) Federal Reserve access rules also changed during that stretch. In August 2022, the Federal Reserve Board adopted final account-access guidelines with a three-tier review system for applicants, and the Kansas City Fed classified Kraken as a Tier 3 entity, the category for firms facing the heaviest scrutiny. (federalreserve.gov, kansascityfed.org) Kraken’s charter matters here. Wyoming Special Purpose Depository Institutions are state-chartered banks designed for digital-asset custody and payments, and Kraken’s full-reserve structure requires liquid assets equal to or greater than client fiat deposits, according to a legal analysis of the approval. (consumerfinancialserviceslawmonitor.com) Not everyone welcomed the move. Reuters, via syndicated reports published April 10, said banks and some policy critics raised concerns that a crypto-native firm with Fed access could create new anti-money-laundering, liquidity, and operational risks, even with limits on the account. (msn.com) The backdrop is a failed rival bid. On October 31, 2025, the United States Court of Appeals for the Tenth Circuit ruled that Federal Reserve banks have discretion to deny master-account requests, siding against Wyoming-based Custodia Bank in its long-running case over similar access. (ca10.uscourts.gov) For now, Kraken has a narrower win than a blank check: one limited account, one-year term, one crypto-native bank on Fed rails. The next test is whether the arrangement stays in place and whether other applicants can clear the same gate. (kansascityfed.org, ca10.uscourts.gov)