Kraken Gains Access to the Federal Reserve

According to The Wall Street Journal, cryptocurrency exchange Kraken has gained access to key payment systems of the U.S. Federal Reserve. It is the first time a crypto-industry company in the United States has received a so-called master account designed for institutional and business clients.

The account was granted to the company’s banking division, Kraken Financial. Thanks to this approval, the firm can process transfers using the same infrastructure utilized by traditional banks and credit unions.

Although Kraken will not receive full access to all Federal Reserve services, the decision is still considered an important milestone for the cryptocurrency market. Many companies from the sector have previously attempted—without success—to gain access to the Fed’s systems.

A direct connection to the central bank’s infrastructure could significantly speed up fund transfers for institutional clients and professional traders. At the same time, it may reduce reliance on intermediary banks when settling transactions in U.S. dollars.

Kraken has been seeking access to the Fed’s systems for several years. The company submitted its application for a master account in October 2020 through its banking subsidiary, Kraken Financial. This means the decision took roughly five to six years.

Other crypto companies are also hoping for similar approval. One of them is Ripple, which has likewise applied for access to Federal Reserve systems. However, the company submitted its request later and is still waiting for regulators’ decision.

Kraken already has experience bridging the cryptocurrency sector with traditional banking. In 2020, it became the first crypto exchange in the United States to receive approval from the state of Wyoming to establish a Special Purpose Depository Institution (SPDI). Operating as Kraken Financial, the entity offers services such as digital asset custody, deposit-taking, and other custodial solutions.