Kraken Financial Wins Fed Master Account Approval from Kansas City Reserve Bank After 5.5-Year Review

Kraken's banking subsidiary, Kraken Financial, has been cleared by the Federal Reserve Bank of Kansas City to open a master account at the Federal Reserve, giving the second-largest U.S. cryptocurrency exchange limited direct access to the central bank's payment system, according to cryptocurrency journalist Eleanor Terrett. The approval, granted five and a half years after Kraken filed its application in October 2020, allows the firm to access payment infrastructure, hold reserves and settle transactions in central bank funds but bars it from using Fed lending facilities, extending loans, tapping the discount window or operating as a traditional commercial bank. Sources cited in the report describe Kraken's status as a pilot program for this model, and note that the move is seen as historically significant for an industry long kept at arm's length from traditional banking and may spur additional master account applications, with Custodia Bank, Anchorage and Ripple's U.S. banking partner already having submitted requests.