Kraken goes directly to the Federal Reserve to become the first cryptocurrency bank in the United States

Kraken has been approved to open a master account with the Federal Reserve, giving its banking unit Kraken Financial direct access to the Fed’s core payments system.

As such, it becomes the first digital currency bank in the United States to operate on the same payments infrastructure used by traditional banks.

The new account allows banks to connect directly to the Fedwire system without the need for an intermediary bank, which is expected to speed up fiat transfers for institutions and reduce operational complexity.

Arjun Sethi, co-CEO of Kraken parent company Payward, said the move allows payments to be made directly through Fedwire and better integrates regulated cash with the digital currency market.

The development comes as Kraken has filed a confidential draft registration with the U.S. Securities and Exchange Commission in preparation for a potential initial public offering.

The company has previously raised $800 million in a funding round valuing it at approximately $20 billion, with participation from Citadel Securities, Jane Street and DRW Venture Capital.

Kraken Financial operates under an SPDI license in Wyoming as a full reserve bank, holding liquid assets equal to or exceeding 100% of customer cash deposits.

The company plans to gradually roll out its services starting with institutional clients and subsequently expand integration within the “Payward” platform in coordination with regulators.

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