Kraken's Fed Master Account Delay Tests US Crypto Banking Access

Kraken Financial's plans to offer direct banking services have hit a snag. The Wyoming-chartered bank received approval for its Federal Reserve master account in March, but it has yet to activate it more than four months later.

This delay means that customer dollar wires are still being processed through an intermediary bank, rather than directly through the Federal Reserve payment systems.

The Federal Reserve master account allows a bank to hold reserves directly with the central bank and permits direct settlement of US dollar transactions. Kraken could eventually use Fedwire without depending on correspondent banking partners, reducing exposure to banking disruptions and changes in risk policies at commercial banks.