Kraken’s Banking Arm Secures Access to Fed Payments System

Kraken’s banking arm has secured access to the US central bank’s payments infrastructure, marking the first time a digital-asset bank has been granted such connectivity.

Kraken Financial, the crypto exchange’s Wyoming-chartered bank, has been approved for a limited-purpose master account with the Federal Reserve. The decision allows the firm to connect directly to key US payment rails, including Fedwire.

Direct access means the bank can move US dollars through the central bank’s payments system without relying on intermediary banks, which is expected to speed up settlements and reduce operational costs for institutional clients using Kraken’s platform.

The rollout will begin gradually, with initial functionality focused on supporting institutional activity on the exchange. Over time, the capabilities will be integrated more broadly into the infrastructure of Payward, Kraken’s parent company, in coordination with regulators.

The approval marks a significant milestone for the digital-assets sector, which has long sought greater integration with traditional financial infrastructure. Access to the Federal Reserve’s payments system is typically reserved for regulated banks and financial institutions, making the move a notable step for a crypto-focused lender.

Kraken said the decision follows years of regulatory engagement and close coordination with both federal authorities and supervisors in Wyoming, where the bank is chartered.

Although the account provides direct payment connectivity, it does not grant the full range of privileges typically associated with standard Federal Reserve master accounts.

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 U.S. 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.”