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Kraken Financial makes history as the first digital asset bank to gain direct access to the Federal Reserve's payment infrastructure and Fedwire.
Kraken Financial has become the first digital asset bank in American history to gain direct access to the central bank’s payment infrastructure.
Direct Access to Core US Payment Systems
Obtaining a “master account” allows Kraken Financial to connect directly to key Federal Reserve payment systems, including Fedwire. This means the bank will be able to perform fiat currency transfers without the mediation of traditional banks, potentially reducing costs, accelerating settlement, and simplifying its operational structure.
According to Arjun Sethi, co-CEO of Payward—Kraken’s parent company—the decision represents a significant moment for the integration of crypto infrastructure and the traditional financial system.
He noted that with this access, the institution will no longer function as a peripheral participant in the banking system, but as a directly connected financial institution.
A New Model for Fiat and Crypto Integration
Kraken Financial operates as a “Special Purpose Depository Institution” (SPDI)—a specific banking license in Wyoming that requires full reserves. This means the bank must hold liquid assets equal to or greater than 100% of customer deposits.
This model, combined with a direct connection to the Federal Reserve, could create a new infrastructure for financial markets. The company indicated that in the future, such an architecture could enable atomic settlements between fiat currencies and crypto assets, as well as integration between institutional cash management and digital asset custody.
Kraken plans a phased rollout of these new capabilities, initially targeting institutional clients on the platform.
Five Years of Regulatory Process
The approval comes after more than five years of regulatory reviews and audits, involving coordination with the Federal Reserve and Wyoming state regulators. During this period, the institution underwent a series of evaluations regarding its operational procedures, liquidity, and control systems.
According to Kraken, the decision could be a major step toward building long-term infrastructure that bridges traditional financial markets with digital assets while remaining within a regulated banking system.
The company stated it will continue to work alongside regulators while expanding its payment capabilities and integrating the new infrastructure into the broader Payward platform.