Kraken has received approval for a Federal Reserve master
account, allowing its banking unit, Kraken Financial, to access the Fed’s core
payment systems directly. The move makes it the first U.S. digital asset bank
to operate on the same payment rails as traditional financial institutions.
The approval comes as Kraken has filed a confidential draft
registration with the U.S.
Securities and Exchange Commission for a proposed initial public offering.
The filing follows an $800 million funding round that valued the company at $20
billion, including a $200 million investment from Citadel Securities and
contributions from Jane Street and DRW Venture Capital.
Kraken Rolls Out Fed-Connected Banking Platform
Kraken Financial’s Fed account follows more than five years
of regulatory engagement with U.S. and Wyoming authorities. It enables the bank
to connect directly to Fedwire without relying on intermediary banks. This is
expected to streamline fiat transfers for institutional clients and reduce
operational complexity.
Arjun Sethi, co-CEO of Payward and Kraken, said the account
allows the bank to “settle directly on Fedwire, reduce dependency on
correspondent banks, and integrate regulated fiat liquidity directly into
digital asset markets.”
He added that it positions Kraken Financial as a
directly connected participant in the U.S. banking system, rather than a
peripheral one, supporting more efficient operations for institutional clients.
Kraken Financial plans a phased rollout, initially focusing
on institutional client activity at Kraken. The capabilities will be gradually
integrated into Payward’s broader platform in coordination with regulators.
Bank Maintains Compliance While Scaling Operations
As a Wyoming Special Purpose Depository Institution, Kraken
Financial operates on a full-reserve basis. The bank maintains liquid assets
equal to or exceeding 100% of client fiat deposits.
JUST IN: Bitcoin exchange Kraken becomes first crypto bank to receive a Federal Reserve master account 🤯This makes Kraken the first digital asset bank in U.S. history to gain direct access to the Federal Reserve’s payment infrastructure 🚀 pic.twitter.com/ip579ywQzA
— Bitcoin Magazine (@BitcoinMagazine) March 4, 2026
It will continue to work
with the Federal Reserve and Wyoming regulators as it expands its payment
capabilities.
Payward, Inc., which powers Kraken, operates a unified
infrastructure platform supporting multiple products across asset classes. Its
system combines a global liquidity pool, a unified risk and margin engine, a
central collateral and settlement system, and a compliance and licensing
framework.
The structure is designed to allow the company to scale while
maintaining regulatory and operational standards.
This article was written by Tareq Sikder at www.financemagnates.com.
—
— CONTENT NOT MODERATED BY G6
— Please be careful with this content. If you don’t think it should be here, please get in touch with us at [email protected]
