Kraken Becomes First Crypto Firm to Win Access to Fed’s Core Payments System

The cryptocurrency sector has moved a significant step closer to becoming part of the traditional financial ecosystem.

Kraken has achieved a major breakthrough as its banking division secured access to the Federal Reserve’s primary payment infrastructure. This makes it the first crypto-related firm capable of transferring funds through the same network used by thousands of banks and credit unions.

With the approval of a Federal Reserve master account, Kraken Financial can now process transactions more efficiently and with greater speed, particularly benefiting institutional clients and professional traders.

Although Kraken does not gain full banking privileges—such as earning interest on reserves held at the central bank—this milestone represents a long-awaited victory for the crypto industry, which has historically struggled to gain entry into the Fed’s system.

U.S. Senator Cynthia Lummis described the development as a landmark moment for digital assets, emphasizing its importance in the evolution of the sector.

The outlook for the crypto industry has improved significantly under the leadership of Donald Trump, who has expressed ambitions to position the United States as a global hub for cryptocurrency. His administration has introduced supportive regulations and encouraged a more structured legal framework, contrasting with the stricter stance of previous leadership.

By obtaining this master account, Kraken Financial gains direct connectivity to Fedwire, a crucial interbank network that processes trillions of dollars in daily transactions. Previously, the firm depended on intermediary banks to facilitate fund transfers.

The approval was granted by the Federal Reserve Bank of Kansas City and officially announced alongside Kraken, also known legally as Payward.

According to Kraken’s co-CEO Arjun Sethi, this development enhances the reliability and efficiency of moving fiat currency in and out of digital asset markets.

However, the decision has drawn criticism from traditional banking groups, which argue that crypto firms may not meet the same regulatory and anti-money laundering standards required of banks.

Industry representatives have also raised concerns about the lack of transparency surrounding the approval process and the safeguards implemented to mitigate potential risks.

Founded in 2011, Kraken operates one of the leading cryptocurrency exchanges and has expanded into services such as payments and institutional trading. The company recently achieved a valuation of $20 billion and is preparing for a potential initial public offering.

The level of access granted aligns with the Federal Reserve’s proposed “limited” or “skinny” master account model, allowing fintech and crypto firms to use payment systems without accessing full banking benefits like central bank lending facilities.

Despite the progress, traditional banks remain cautious. Financial industry groups have warned that granting such access—even in a restricted form—could pose risks to the stability of the U.S. financial system.

Meanwhile, crypto firms are continuing efforts to expand their role in financial services. In a related move, regulators approved plans from companies like Circle and Ripple to establish national trust banks, enabling them to offer select banking-like services such as digital asset custody, though without traditional deposit and lending capabilities.

Voice of Osiz

At Osiz, we see Kraken gaining access to the Federal Reserve’s payment infrastructure as a transformative leap for the crypto ecosystem. This milestone signals a stronger convergence between digital assets and traditional finance, paving the way for faster and more reliable transactions through systems like Fedwire. The recognition from policymakers such as Cynthia Lummis further reinforces the growing legitimacy of crypto in mainstream finance. While regulatory limitations still exist, this move highlights increasing institutional trust and adoption. At Osiz, we believe such developments will accelerate innovation in crypto exchange platforms and financial solutions. It also opens new opportunities for businesses to build compliant, scalable, and future-ready digital asset services. As the industry evolves, Osiz remains committed to delivering cutting-edge blockchain solutions aligned with this new financial era.

Source: The Wall Street Journal