Kraken's Wyoming bank unit becomes first crypto-linked firm granted a direct Fed account

Kraken has secured a rare foothold inside the U.S. payments system after its Wyoming-chartered banking subsidiary, Kraken Financial, won approval for a Federal Reserve account. The authorization does not apply to the broader Kraken crypto exchange. The Federal Reserve Bank of Kansas City approved the account on March 4, 2026. Reuters reported the arrangement is limited in scope, includes specific restrictions, and carries an initial one-year term. The account connects Kraken Financial more directly to the Federal Reserve's payment rails used by banks, potentially reducing reliance on intermediary banks for certain transactions. It is not a full master account and does not place the firm on the same footing as a traditional commercial bank. The decision is closely watched because digital-asset companies have long sought tighter links to the U.S. banking system, efforts that have faced resistance from regulators and incumbent banks. The approval could influence how other firms pursue access and intensify calls for clearer guidance on how crypto-related banking fits within existing payment and oversight frameworks. Fed access comes with explicit limits According to Reuters, the account provides access to Fedwire and allows Kraken Financial to hold limited overnight balances. That setup could speed wholesale fund movements and trim some banking costs. The access remains constrained: Kraken Financial cannot earn interest on reserve balances, cannot tap the Federal Reserve's emergency lending facilities, and does not receive access to FedNow or ACH under the current structure. Reuters said Federal Reserve Vice Chair for Supervision Michelle Bowman characterized the approach as "a bit of an experiment," underscoring official caution and the sense that the account functions as a controlled test case rather than a broad opening of central bank services. Criticism from banks and lawmakers The move has drawn pushback from banking groups and members of Congress who argue a crypto-linked firm should not gain a direct channel into U.S. payment infrastructure without clearer rules and a fuller public rationale. Reuters reported the American Bankers Association and Rep. Maxine Waters raised concerns spanning money-laundering risk, operational risk, and the absence of a well-defined framework for limited-purpose Fed accounts. Waters sent a letter to the Kansas City Fed on March 26 requesting more detail on the approval process. Despite the criticism, the decision may signal a path for other nontraditional institutions. Reuters reported that Ripple, Anchorage Digital, and Wise have expressed interest in similar access, and that the Fed has been exploring restricted account models. Kraken Financial's approval may now serve as an early template in the coming debate over who qualifies for direct entry to America's payment system.