Kraken Financial Gets A Master Account From The Federal Reserve

A major milestone for Wyoming’s digital asset industry is now official: Kraken Financial has been approved for a Federal Reserve master account.

The approval, granted by the Federal Reserve Bank of Kansas City, gives the Cheyenne-headquartered institution direct access to the nation’s payments system. With the limited-purpose master account, Kraken Financial can now settle transactions in central bank money directly with the Federal Reserve — a first for a digital asset company.

The decision comes after a five-and-a-half-year process and marks a historic moment not just for Kraken, but for the broader cryptocurrency and fintech industries. Master accounts allow institutions to access services such as Fedwire and process payments without relying on intermediary or correspondent banks.

Arjun Sethi, co-CEO of Payward and Kraken, called the approval a turning point.

“This milestone marks the convergence of crypto infrastructure and sovereign financial rails,” Sethi said. “With a Federal Reserve master account, we can operate not as a peripheral participant in the U.S. banking system, but as a directly connected financial institution.”

Kraken Financial is structured as a Wyoming Special Purpose Depository Institution (SPDI), operating under a full-reserve model that requires it to hold 100% reserves against deposits. Sethi said direct Fed access strengthens that framework by allowing the company to settle directly on Fedwire, reduce reliance on correspondent banks and integrate regulated fiat liquidity into digital asset markets.

“Over time, this architecture could enable atomic settlement between fiat and crypto, institutional-grade cash management integrated with digital asset custody, and programmable financial products built within a fully regulated framework,” Sethi said. “This is what it looks like when crypto infrastructure matures into core financial infrastructure.”

Wyoming has positioned itself as a national leader in digital asset regulation, creating the SPDI charter specifically for companies like Kraken Financial. State leaders say the approval signals federal recognition of that regulatory structure and could pave the way for additional digital asset institutions seeking similar access.

“This approval is a watershed moment for the digital asset industry,” said Senator Lummis. “The Federal Reserve has acknowledged what I’ve always said was the case—that a digital asset company can balance innovation with strong risk management. Though approval took five and a half years, the Fed’s actions—at long last—validate Wyoming’s thoughtful regulatory framework. I look forward to resolution of further pending applications in the coming weeks. I congratulate Kraken, the Kansas City Fed, and the Board of Governors for this monumental step towards making payments safer, faster, and cheaper.”

“This news has been a long time coming, but Wyoming welcomes it nonetheless,” said Governor Gordon. “This approval of a master account for Kraken by the Federal Reserve signals support for Wyoming’s banking and digital asset laws. This is good news for our state banks and our special purpose depository institutions. I am pleased by this development. Thank you to Senator Lummis for her steadfast commitment to getting us to this place. She has done yeomen’s work in the banking and finance space.”

For Kraken Financial, the master account means operating not on the edges of the traditional banking system — but directly within it.