Key Insights: In recent crypto news, Kraken has secured a Federal Reserve master account for its banking arm, Kraken Financial. The approval was granted by the Key Insights: In recent crypto news, Kraken has secured a Federal Reserve master account for its banking arm, Kraken Financial. The approval was granted by the

Crypto News: Kraken Becomes First Exchange to Secure Federal Reserve Payment Systems

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Key Insights:

  • Kraken secured a Fed master account for Kraken Financial, gaining direct access to Fedwire for payment settlement in recent crypto news.
  • The approval can speed up USD deposits and withdrawals for large traders and institutional clients.
  • Trump Calls Out Banks’ Threat to CLARITY Act as Charles Hoskinson and Brad Garlinghouse echo his remarks

In recent crypto news, Kraken has secured a Federal Reserve master account for its banking arm, Kraken Financial. The approval was granted by the Federal Reserve Bank of Kansas City after an application filed in October 2020.

Crypto News: Kraken Secures a Fed Master Account

Federal master account provides direct access to the Federal Reserve’s core payment infrastructure. The Fedwire network processes large-value transfers between financial institutions. With this access, Kraken Financial can settle U.S. dollar payments in central bank money without relying on intermediary banks.

Therefore, this crypto news highlights the first time a crypto-native company has received such access. The account is structured under a limited-purpose framework often referred to as a “skinny” master account. The concept has been discussed by Federal Reserve Governor Christopher Waller as part of a broader proposal to expand payment access while restricting traditional banking privileges.

Kraken Financial operates under a Wyoming special-purpose depository institution charter. The state’s SPDI framework is designed for digital asset firms that hold customer deposits while maintaining full reserves. The approval process lasted more than five years from the initial filing date.

Kraken Approval can Speed up Deposits and Withdrawals

Kraken depended on correspondent banks to process U.S. dollar transfers before receiving the master account. Those arrangements required third-party settlement for inbound and outbound payments. Direct access changes that process by enabling the firm to move funds across Federal Reserve rails independently.

Hence, the exchange stated that the new arrangement improves transaction speed for large traders and institutional clients. Faster settlement via Fedwire reduces processing delays associated with intermediary banking relationships. Also, it streamlines liquidity management for high-volume market participants.

Kraken’s move comes as the company prepares for a potential initial public offering. Its parent company, Payward, has expanded operations through acquisitions. In 2024, it acquired the futures trading platform NinjaTrader for $1.5 billion. It also purchased the derivatives venue Small Exchange for $100 million.

Thus, this crypto news shows the firm has entered the tokenization sector as well. It acquired Backed Finance, known for issuing tokenized equities under the xStocks brand. These transactions reflect efforts to broaden its service offerings ahead of a possible listing.

Donald Trump Calls Out Banks’ Threat to CLARITY Act

Meanwhile, Donald Trump criticized U.S. banks over efforts to weaken the proposed GENIUS Act and delay progress on the CLARITY Act. In a statement posted on Truth Social, he said banks were posting record profits while attempting to undercut legislation aimed at advancing the domestic crypto industry. He called for swift completion of market structure reforms and warned that failure to pass the CLARITY Act could push digital asset innovation to jurisdictions such as China.

Trump’s Post on Truth Social | Source: <a href=Trump’s Post on Truth Social | Source: Truth Social

Following the remarks, Charles Hoskinson and Brad Garlinghouse publicly supported the call for legislative progress. Both executives have previously urged U.S. lawmakers to establish clearer regulatory standards for digital assets. Their responses aligned with Trump’s message that regulatory certainty is necessary to retain crypto firms and capital within the United States.

In other recent crypto news, we had reported that Cardano founder Charles Hoskinson criticized the CLARITY Act over concerns that many new tokens could be treated as securities by default. He made the remarks as Senate talks stalled after banks and crypto firms failed to agree on stablecoin reward models by the March 1 deadline.

The post Crypto News: Kraken Becomes First Exchange to Secure Federal Reserve Payment Systems appeared first on The Market Periodical.

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