Kraken Financial, the Wyoming-chartered bank owned by the crypto exchange, secured a Federal Reserve master account on March 4, 2026 — the first such approval for a crypto firm. But more than four months later, the account still isn't live. CEO Brian Mathena said the bank is still working to operationalize it, and customer wires continue to run through a middleman, Dart Bank, according to Kraken's support pages.
Why the approval was a big deal
Kraken applied as a Tier 3 firm — a state-chartered bank with no federal insurance and no federal watchdog. That category rarely gets approved. Fintech analyst Jason Mikula noted that only three of 53 Tier 3 or unclassified applicants have ever won a Fed master account. Kraken is the first crypto firm to do so; the other two are a Puerto Rico cooperative and Numisma Bank, neither involved in crypto.
Fed Vice Chair for Supervision Michelle Bowman called Tier 3 access 'unobtainium' at an American Bankers Association event in March. That makes Kraken's approval a notable exception — but one with strings attached.
Strings, limits, and a pending Supreme Court case
The Kansas City Fed approved Kraken's account for one year only, with undisclosed limits 'tailored' to Kraken's risks. Representative Maxine Waters pressed Kansas City Fed President Jeff Schmid in March, noting that the term 'limited purpose account' appears nowhere in law or Fed guidelines, and asked about ACH network access and interest on balances. Kraken's March announcement described a phased rollout starting with big institutional clients.
The timing isn't great for other applicants. The Fed asked Reserve Banks to pause all Tier 3 decisions while finalizing a payment account proposal for non-banks. Comments close July 27, and final rules are expected by year-end. That pause could affect Ripple's pending application and other firms waiting for access.
Meanwhile, Custodia Bank — another Wyoming bank that applied in October 2020 and was denied in January 2023 — asked the Supreme Court to intervene on July 10, calling the denial a 'death sentence'.
Kraken has a confidential IPO filing in progress. The master account, once live, would let it settle payments directly with the Fed, cutting out correspondent banks. But the one-year term and the Fed's broader rulemaking mean the account's long-term status is uncertain. The next concrete deadline is July 27, when the Fed's comment period closes on its non-bank payment account proposal.
