Lawmaker Questions Fed Approval of Kraken Account

• Maxine Waters questions the Fed’s approval of Kraken’s access to the U.S. payment system.
• Kraken became the first crypto firm to gain direct access to the Federal Reserve’s payment system.
• Lawmakers are seeking clarity on whether Kraken can use core services like Fedwire and FedACH.

US lawmaker Maxine Waters has raised questions over the Kansas City Federal Reserve’s decision to approve a special account for Kraken Financial.

The approval allows Kraken, a Wyoming-chartered Special Purpose Depository Institution, to access the Federal Reserve’s payment system. It marks the first time a crypto firm has received this level of access.

Waters argues the decision may lack a clear legal basis. The term “limited purpose account” does not appear in federal law or in the Federal Reserve’s own account access guidelines.

Scope of Access Remains Unclear

The core issue is what Kraken can actually do with this account. The Kansas City Fed has not disclosed these details, citing confidentiality. This lack of transparency is now a major point of concern.

Waters is asking whether the firm can access key Fed services such as FedACH, Fedwire, FedCash, or securities settlement systems. She also questioned whether limits apply to overdrafts, balances, or liquidity usage.

If Kraken has broad access, it would allow the firm to settle payments directly without relying on traditional banks. If access is restricted, the practical impact may be limited.

Process and Oversight Under Review

Waters is also questioning how the approval was made. She asked whether the Kansas City Fed coordinated with the Federal Reserve Board, other regional banks, or government officials before granting access.

She requested details on whether any external influence played a role. The account was approved on March 4 for a one-year term, with restrictions tied to Kraken’s business model and risk profile.

Kraken was classified as a Tier 3 entity, meaning it underwent the strictest review level. A formal response from the Kansas City Fed is due by April 10, 2026.

It is important to note that the decision comes as regulators continue to shape rules governing access to the Federal Reserve’s payment rails.

The Federal Reserve had recently asked for public input on a new type of payment account, with the consultation closing in February 2026. The Kraken approval came shortly after, before any final framework was released.

At the same time, other crypto firms are seeking similar access. Previous attempts, including Custodia Bank’s application, were denied.

Interestingly, crypto firms and Wyoming officials support the move. They see it as a step toward integrating digital asset infrastructure with the US financial system.

Related: Kraken Parent Payward Partners With Nasdaq to Link Tokenized Stocks With Blockchain