Kraken Financial Becomes First US Crypto Bank with Federal Reserve Master Account

2026-03-05 - 09:03

Payward, the platform behind Kraken, said the Federal Reserve has granted Kraken Financial, its Wyoming-chartered bank, a master account, making it the first digital asset bank in US history to gain direct access to the Federal Reserve’s payment infrastructure. The approval follows more than five years of regulatory engagement, operational review, and coordination with US and Wyoming authorities. It allows Kraken Financial to connect directly to core US payment rails, including Fedwire, without relying on intermediary banks, enabling faster fiat transfers for institutional clients and reducing operational complexity. Arjun Sethi “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,” said Arjun Sethi, co-CEO of Payward and Kraken. “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.” Sethi added that over time, the architecture could enable atomic settlement between fiat and crypto, institutional-grade cash management integrated with digital asset custody, and programmable financial products within a regulated framework. Kraken Financial will begin a phased rollout, initially supporting institutional client activity at Kraken, with broader integration into Payward’s platform over time. As a Wyoming Special Purpose Depository Institution (SPDI), it operates on a full-reserve basis, holding liquid assets equal to or exceeding client deposits. The bank will continue to work with the Federal Reserve and Wyoming regulators as it expands payment capabilities, aiming to provide a regulated bridge between digital assets and traditional finance. Featured image credit: Edited by Fintech News Switzerland, based on image by wahyu_t via Freepik