US cryptocurrency exchange Kraken has become the first company to secure a master account from the US Federal Reserve.
Kraken Financial, the exchange’s banking unit, has gained access to the Fed’s key payment systems, allowing the platform to move money on the same rails used by banks and credit unions, according to an announcement on Wednesday.
The Federal Reserve Bank of Kansas City approved a limited-purpose account for Wyoming-based Payward Financial as a “Tier 3 entity,” according to a statement by the bank.
“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,” Kraken co-CEO Arjun Sethi said.
The news marks a milestone for the crypto industry in the US, though the approval does not provide the full range of services available to banks, including payment of interest on reserves held at the central bank.
Several crypto companies in the US have been pursuing a master account with the Fed for years, with Caitlin Long’s Custodia Bank doubling down on efforts to obtain one through a court petition in late 2025.
A “historic shift” for the US crypto industry
The decision marks a “historic shift” for the crypto industry in the US, journalist Eleanor Terrett wrote in an X post, highlighting that it signals a softer tone at the Fed, which critics had previously described as hostile to crypto under the prior administration.
“The decision also impliedly recognizes that the Fed believes Kraken has sufficient anti-money laundering and sanctions compliance practices to curb illicit finance risk, and that Wyoming’s regulatory framework for special purpose depository institutions is in line with Federal banking standards,” Terrett said.
US Senator Cynthia Lummis referred to the approval as a “watershed milestone in the history of digital assets,” The Wall Street Journal reported Wednesday.
Limited master account access
The Kansas City Fed’s announcement detailed that the approval provides Kraken Financial with a limited-purpose account for an initial term of one year. It includes restrictions and limitations tailored for Kraken Financial’s business model and risk profile.
According to the WSJ, Kraken’s limited account access is similar to the “skinny” master account proposed by the Fed’s Board of Governors in late 2025.
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Christopher Waller, a member of the Fed Board of Governors, introduced the concept of “skinny” accounts in October, saying it would allow the US central bank to tailor services based on the risks posed by an individual firm.
The approval gives the exchange the ability to settle directly on Fedwire, reduce dependency on correspondent banks, and integrate fiat liquidity into crypto, he added.
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