Kraken has become the first digital asset bank in US history to gain direct access to the Federal Reserve’s payment infrastructure.
Kraken Financial, the Wyoming-chartered bank, has been granted a Federal Reserve master account.
Through the Federal Reserve master account, Kraken Financial can connect directly to core US payment rails, including Fedwire, without relying on intermediary banks.
Arjun Sethi, co-CEO of Payward and Kraken, said: “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.
“For a Wyoming SPDI structured on a full-reserve model, this creates a uniquely resilient foundation. It gives us the ability to settle directly on Fedwire, reduce dependency on correspondent banks and integrate regulated fiat liquidity directly into digital asset markets.”
Kraken Financial will begin with a phased rollout, initially focused on facilitating institutional client activity at Kraken. Capabilities will be integrated into Payward’s broader infrastructure over time, in close coordination with regulators.
“Over time, this architecture could enable atomic settlement between fiat and crypto, institutional-grade cash management integrated with digital asset custody, and programmable financial products built within a fully regulated framework. This is what it looks like when crypto infrastructure matures into core financial infrastructure,” Sethi added.
The approval follows more than five years of sustained regulatory engagement, extensive examination, and operational scrutiny. As a Wyoming-chartered Special Purpose Depository Institution (SPDI), Kraken Financial is a state-regulated bank operating on a full-reserve basis, holding liquid assets equal to or exceeding 100% of client fiat deposits.
Kraken Digital Asset Exchange secured an Electronic Money Institution (EMI) authorisation by the Financial Conduct Authority (FCA) last year.
