
Ryan Rasmussen
6.2K posts

Ryan Rasmussen
@RasterlyRock
Head of Research @Bitwise

















🚨NEW: @krakenfx, the U.S.’s second-largest crypto exchange, has just done something no other crypto firm has done before: secured coveted access to the Federal Reserve. According to a report by the @WSJ released this morning, the exchange’s banking arm, Kraken Financial, has been approved for a Federal Reserve master account by the Kansas City Fed, marking the first time a crypto-native company has gained direct, albeit limited, access to the Fed’s payments system. The approval comes five and a half years after Kraken filed its application with the Kansas City Fed in October 2020. The account gives Kraken a direct line into the Fed’s payments rails, but not access to Federal Reserve lending facilities. Under the limited-purpose, or “skinny,” master account framework floated by Fed Governor Christopher Waller, the firm can hold reserves and settle in central bank money, but it cannot lend, access the Fed’s discount window, or operate as a traditional commercial bank. Governor Waller is seeking to finalize his skinny master account proposal by the end of this year. The Kraken approval, sources tell me, is designed as a “pilot” program to trial the skinny master account concept. The skinny master account is in line with payments-only accounts provided by central banks in the United Kingdom, the European Union and Switzerland. The decision marks a historic shift for an industry long shut out of the traditional banking system and signals a softer tone at the Fed, which critics had previously described as hostile to crypto under the prior administration. The decision also impliedly recognizes that the Fed believes Kraken has sufficient anti-money laundering and sanctions compliance practices to curb illicit finance risk, and that Wyoming’s regulatory framework for special purpose depository institutions (SPDIs) is in line with Federal banking standards. This could kick off a surge of Fed master account applications from other crypto firms. On the horizon: Wyoming’s @custodiabank, which has been chasing access nearly as long as Kraken and has been engaged in litigation against the Fed since 2022. @Anchorage, an OCC-regulated trust bank, and @Ripple's U.S. banking partner have also applied for master accounts. More to come.

I wasn’t wrong, I was just a tad early.




