Kraken first digital asset bank gets Fed green light

Kraken said its Wyoming-chartered bank, Kraken Financial, has been granted a Federal Reserve master account, making Kraken the first digital asset bank in U.S. history with direct access to the Federal Reserve’s payment infrastructure.

The company said in an announcement the approval follows more than five years of sustained regulatory engagement, extensive examination and operational scrutiny and integrates Federal Reserve connectivity into Payward’s settlement and payments layer.

Through the master account, Kraken Financial can connect directly to core U.S. payment rails, including Fedwire, without relying on intermediary banks. The release says direct connectivity will enable faster, more efficient fiat movement for institutional clients while reducing complexity, cost and operational dependencies.

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.” The company also noted Kraken Financial is a Wyoming-chartered Special Purpose Depository Institution (SPDI) operating on a full-reserve basis, holding liquid assets equal to or exceeding 100% of client fiat deposits.

Kraken Financial will begin a phased rollout focused initially on facilitating institutional client activity at Kraken, with capabilities to be integrated into Payward’s broader infrastructure over time, and will continue coordinating with the Federal Reserve and Wyoming regulators as it expands payment capabilities.