Crypto Firm Kraken Granted Landmark Fed Payment Account, Sparking Concerns

The approval raises questions about financial system risks and the opaque approval process.

Apr. 10, 2026 at 10:06am

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A high-contrast black and white close-up image of the intricate gears and machinery inside a large industrial banking vault, conveying a sense of the heavy, powerful infrastructure underlying the financial system.The Federal Reserve's decision to grant crypto exchange Kraken a master account raises concerns about the risks of allowing crypto firms direct access to the central bank's payment rails.Kansas City Today

Crypto exchange Kraken has become the first-ever crypto company to win a Federal Reserve master account, allowing it to directly access the central bank's payment rails. The decision has sparked concerns among banks and lawmakers over potential financial system vulnerabilities, as well as questions about the transparency of the approval process.

Why it matters

The Kraken account marks a major victory for the crypto industry, granting it more access to the mainstream financial system. However, banks and regulators worry that crypto firms' weaker compliance and operational controls could create systemic risks if granted direct access to the Fed's payment infrastructure.

The details

Kraken's limited-purpose Fed master account will allow its Wyoming banking arm to access the Fedwire wholesale payments system and hold limited overnight balances, cutting out bank intermediaries. But unlike typical accountholders, Kraken cannot earn interest on reserves or access the Fed's emergency lending or other payment systems. The account details have not been publicly disclosed.

  • Kraken first applied for the Fed master account over 5 years ago.
  • The Kansas City Fed granted Kraken the account on a 1-year initial basis last month.

The players

Kraken

One of the world's largest crypto exchanges, with both retail and institutional clients.

Maxine Waters

The top Democrat on the House Financial Services Committee, who has asked the Kansas City Fed to disclose more details about Kraken's account by Friday.

Kansas City Fed

The regional Federal Reserve bank that granted Kraken the master account.

Michelle Bowman

A Federal Reserve regulatory chief who acknowledged that Kraken's account is "a bit of an experiment".

Michael Barr

A Federal Reserve governor who opposed the Fed's request for information on a potential new type of payment account, citing money-laundering risks.

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What they’re saying

“We look at this as a great testament to regulatory rigor and cooperation. It promotes principles of both safety and soundness, and innovation.”

— Jonathan Jachym, Global Head of Policy, Kraken

“The concern is by introducing institutions that may have less of a track record, less rigorous compliance and operations, even if they have limited models, that it could create a degree of systemic risk.”

— Richard Levin, Chair of Fintech Practice, Taft Stettinius & Hollister

“The AML risks with crypto are unique, but they are entirely manageable.”

— Rachel Anderika, Chief Operating Officer, Anchorage

What’s next

The Kansas City Fed is reviewing the letter from Rep. Maxine Waters requesting more details on Kraken's account by Friday.

The takeaway

Kraken's landmark Fed account highlights the crypto industry's growing access to the mainstream financial system, but also raises concerns from banks and regulators about the potential systemic risks of granting crypto firms direct access to the Fed's payment infrastructure.