Financial and Business News

Kraken Becomes First US Digital Asset Bank with Direct Federal Reserve Access

Wednesday, 04/03/2026 | 12:48 GMT by Tareq Sikder
  • Kraken Financial operates as a Wyoming full-reserve SPDI, holding assets equal to client deposits.
  • The firm plans phased rollout of Fed account, initially focusing on institutional clients.
Kraken (shutterstock)

Kraken has received approval for a Federal Reserve master account, allowing its banking unit, Kraken Financial, to access the Fed’s core payment systems directly. The move makes it the first U.S. digital asset bank to operate on the same payment rails as traditional financial institutions.

The approval comes as Kraken has filed a confidential draft registration with the U.S. Securities and Exchange Commission for a proposed initial public offering. The filing follows an $800 million funding round that valued the company at $20 billion, including a $200 million investment from Citadel Securities and contributions from Jane Street and DRW Venture Capital.

Kraken Rolls Out Fed-Connected Banking Platform

Kraken Financial’s Fed account follows more than five years of regulatory engagement with U.S. and Wyoming authorities. It enables the bank to connect directly to Fedwire without relying on intermediary banks. This is expected to streamline fiat transfers for institutional clients and reduce operational complexity.

Arjun Sethi, co-CEO of Kraken
Arjun Sethi, co-CEO of Kraken, Source: Youtube

Arjun Sethi, co-CEO of Payward and Kraken, said the account allows the bank to “settle directly on Fedwire, reduce dependency on correspondent banks, and integrate regulated fiat liquidity directly into digital asset markets.”

He added that it positions Kraken Financial as a directly connected participant in the U.S. banking system, rather than a peripheral one, supporting more efficient operations for institutional clients.

Kraken Financial plans a phased rollout, initially focusing on institutional client activity at Kraken. The capabilities will be gradually integrated into Payward’s broader platform in coordination with regulators.

Bank Maintains Compliance While Scaling Operations

As a Wyoming Special Purpose Depository Institution, Kraken Financial operates on a full-reserve basis. The bank maintains liquid assets equal to or exceeding 100% of client fiat deposits.

It will continue to work with the Federal Reserve and Wyoming regulators as it expands its payment capabilities.

Payward, Inc., which powers Kraken, operates a unified infrastructure platform supporting multiple products across asset classes. Its system combines a global liquidity pool, a unified risk and margin engine, a central collateral and settlement system, and a compliance and licensing framework.

The structure is designed to allow the company to scale while maintaining regulatory and operational standards.

Kraken has received approval for a Federal Reserve master account, allowing its banking unit, Kraken Financial, to access the Fed’s core payment systems directly. The move makes it the first U.S. digital asset bank to operate on the same payment rails as traditional financial institutions.

The approval comes as Kraken has filed a confidential draft registration with the U.S. Securities and Exchange Commission for a proposed initial public offering. The filing follows an $800 million funding round that valued the company at $20 billion, including a $200 million investment from Citadel Securities and contributions from Jane Street and DRW Venture Capital.

Kraken Rolls Out Fed-Connected Banking Platform

Kraken Financial’s Fed account follows more than five years of regulatory engagement with U.S. and Wyoming authorities. It enables the bank to connect directly to Fedwire without relying on intermediary banks. This is expected to streamline fiat transfers for institutional clients and reduce operational complexity.

Arjun Sethi, co-CEO of Kraken
Arjun Sethi, co-CEO of Kraken, Source: Youtube

Arjun Sethi, co-CEO of Payward and Kraken, said the account allows the bank to “settle directly on Fedwire, reduce dependency on correspondent banks, and integrate regulated fiat liquidity directly into digital asset markets.”

He added that it positions Kraken Financial as a directly connected participant in the U.S. banking system, rather than a peripheral one, supporting more efficient operations for institutional clients.

Kraken Financial plans a phased rollout, initially focusing on institutional client activity at Kraken. The capabilities will be gradually integrated into Payward’s broader platform in coordination with regulators.

Bank Maintains Compliance While Scaling Operations

As a Wyoming Special Purpose Depository Institution, Kraken Financial operates on a full-reserve basis. The bank maintains liquid assets equal to or exceeding 100% of client fiat deposits.

It will continue to work with the Federal Reserve and Wyoming regulators as it expands its payment capabilities.

Payward, Inc., which powers Kraken, operates a unified infrastructure platform supporting multiple products across asset classes. Its system combines a global liquidity pool, a unified risk and margin engine, a central collateral and settlement system, and a compliance and licensing framework.

The structure is designed to allow the company to scale while maintaining regulatory and operational standards.

Topics
cryptocurrency
Kraken
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fintech
About the Author: Tareq Sikder
Tareq Sikder
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A Forex technical analyst and writer who has been engaged in financial writing for 12 years.

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