Kraken Financial, a Wyoming-chartered bank affiliated with Payward and the Bitcoin and cryptocurrency exchange Kraken, has received approval for a Federal Reserve master account. 

According to the company, this makes it the first digital asset-focused bank in the United States to obtain direct access to the Federal Reserve’s payment systems.

A Federal Reserve master account enables an institution to access central bank payment rails, including Fedwire, without relying on intermediary correspondent banks. 

Direct access allows institutions to clear and settle certain transactions through the Federal Reserve system.

Kraken Financial operates as a Wyoming Special Purpose Depository Institution (SPDI), a state-regulated banking structure established to serve digital asset businesses. 

Under Wyoming law, SPDIs are required to maintain a full-reserve model, meaning they must hold liquid assets equal to or exceeding 100% of customer fiat deposits.

The company stated that the approval follows more than five years of regulatory engagement and supervisory review. 

It also noted that the master account will be incorporated into its existing payments and settlement infrastructure.

Arjun Sethi, Co-CEO of Payward and Kraken, commented on the development:

“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.”

He added:

“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 also outlined potential longer-term implications:

“Over time, this architecture could enable atomic settlement between fiat and crypto, institutional-grade cash management integrated with digital asset custody, and programmable financial products built within a fully regulated framework. This is what it looks like when crypto infrastructure matures into core financial infrastructure.”

Kraken Financial stated that it plans to implement the master account access in phases, initially supporting institutional client activity on the Kraken platform. 

Additional integrations are expected over time, subject to regulatory coordination.

The company indicated it will continue working with the Federal Reserve and Wyoming regulators as it expands its payment capabilities.

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