The approval lacks the comprehensive services typically found at conventional banks, such as interest on reserves.
Kraken’s banking unit reportedly gained access to the Federal Reserve’s core payment systems on Wednesday, marking a major step toward integrating crypto into the traditional financial system.
Kraken, a crypto trading platform, told The Wall Street Journal that the Federal Reserve master account had approved Kraken Financial. This meant they could move money on the same payment rails that are used by thousands of banks and credit unions. According to the report, Kraken could process transactions faster and more efficiently for institutional clients and professional traders.
Additionally, the master account would grant Kraken Financial direct access to Fedwire, a key interbank payment network that processes more than $4 trillion in daily transfers. Previously, Kraken relied on intermediary banks to move funds. Although the approval does not provide the full range of services typically offered by traditional banks, such as earning interest on reserves, it is a significant breakthrough for the crypto industry. The industry had long struggled to gain access to the Federal Reserve system.
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