Kraken becomes first crypto exchange to access Federal Reserve payment systems
Cryptocurrency exchange Kraken has gained access to the key payment systems of the U.S. Federal Reserve, becoming the first crypto company able to move funds through the same channels used by thousands of banks and credit unions.
The development was reported by The Wall Street Journal on March 4. Kraken’s banking unit, Kraken Financial, received a so-called “master account” with the Federal Reserve, allowing it to directly use the Fedwire interbank payment network.
Fedwire processes more than $4 trillion in transfers daily, and direct access to the system could significantly speed up deposits and withdrawals for large traders and institutional clients. Previously, Kraken had to rely on intermediary banks to send and receive U.S. dollar transfers. With the new approval, the company will be able to settle payments directly, improving the speed and efficiency of fiat transactions.
Limited access to the Fed system
Despite the significance of the decision, Kraken’s access to the Federal Reserve infrastructure comes with certain limitations. The company will not receive the full range of banking services available to traditional banks, such as earning interest on reserves or accessing the Fed’s emergency lending facilities.The arrangement resembles the concept of a “restricted” or “narrow” master account, which the Federal Reserve discussed late last year. This model allows fintech and crypto firms to use the Fed’s payment infrastructure while excluding other banking privileges. Kraken co-CEO Arjun Sethi said the new status will improve the reliability and efficiency of moving fiat deposits to and from digital asset markets.
Banks raise concerns about crypto access
The prospect of crypto companies gaining access to the Federal Reserve’s payment infrastructure has raised concerns among traditional banks. Organizations such as the Bank Policy Institute have warned that even limited access could pose risks to the U.S. payment system and overall financial stability. For the crypto industry, however, the move is seen as a major step toward deeper integration with the traditional financial system. Senator Cynthia Lummis, a well-known supporter of the crypto sector, called the approval “a landmark moment in the history of digital assets.”Founded in 2011, Kraken operates one of the largest cryptocurrency exchanges in the world. The company has also expanded into other areas, including payments and institutional digital asset trading, and has previously announced plans to pursue an initial public offering (IPO).
Earlier, we reported that Kraken is launching a new SPAC focused on digital asset companies.
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
