Crypto scores first direct access to Fed payment system

The Federal Reserve has granted a crypto firm direct access to America’s core payments systems for the first time — a historic breakthrough that could help reshape the $2.3 trillion digital asset industry.The move scores a major victory for the crypto industry, which has been striving for years to access the Fed’s mainstream payment systems.Kraken Financial, Kraken’s banking unit with operations in crypto-friendly Wyoming, revealed March 4 it had won access to the Fed’s core payment systems.It is the first crypto firm to be able to move money on Fedwire, the same rails used by thousands of the nation’s banks and credit unions.The approval of the limited “master account” at the Fed will allow Kraken Financial to handle transactions more quickly for its clients and professional traders.The historic change, first reported by The Wall Street Journal, won’t give Kraken the full range of services, such as payment of interest on reserves held at the Fed, that banks have.However, the move is “a watershed milestone in the history of digital assets,” said Sen. Cynthia Lummis (R-Wyo.), a staunch advocate for the cryptocurrency industry.

The Federal Reserve has granted a crypto firm direct access to America’s core payments systems for the first time.Olemedia/Getty Images Cryptocurrency total market is about $2.3 trillionThe total value of all cryptocurrencies as of February 2026 is about $2.3 trillion, according to industry reports. Bitcoin accounts for about $1.3 trillion and a market share of about 56%.Stablecoins have added more than $310 billion, indicating a strong liquidity base. This number is down from the highs of late 2025, but it shows the market remains strong, despite macroeconomic challenges and ongoing institutional integration.Kraken win opens access for crypto, fintechFintech and crypto firms have traditionally depended on partner banks for access to the Fed, as well as for compliance infrastructure such as anti-money laundering monitoring.The Kraken decision, approved by the Federal Reserve Bank of Kansas City, comes as crypto entrants have been stalled in their search for operating approval under tight U.S. banking regulations.More Federal Reserve:Warsh nomination stirs Fed independence fears on Wall StreetBanks have argued that crypto and fintech firms shouldn’t be given direct access to payment systems like Fedwire, escalating a fight over who controls access to the core of the U.S. payments infrastructure.“As we know, the payments landscape is actively evolving,” Kansas City Fed President Jeff Schmid said in a March 4 statement. “Throughout this transformation, the integrity and stability of the U.S. payments system remain our priority.”White House supports crypto deregulationPresident Donald Trump’s administration has given the crypto industry a bright green light to pursue entry into the U.S. banking mainstream.The president has vowed to make America the “crypto capital of the world,” a 180-degree shift from the Biden administration’s cooler look toward digital assets. The president has: Installed crypto-friendly regulatorsPushed for legislation to establish a regulatory framework for crypto, per The Wall Street JournalWatched as his sons and business associates pursued lucrative private crypto ventures, The Journal also reportedMaster account gives Kraken direct access to FedwireHaving a Fed master account will give Kraken Financial direct access to Fedwire, a critical interbank payment system that handles more than $4 trillion in average daily fund transfers. The Kraken unit has a special type of Wyoming state bank charter geared toward crypto companies.It previously relied on intermediary banks to move money to other firms.Related: Crypto Allocations by Financial Advisors Hit All-Time High in 2025With direct access to Fedwire, Kraken Financial will avoid intermediary banks.This enables faster, more efficient fiat transfers for institutional clients, while ​reducing operational complexity and costs, the company said in a ⁠March 4 blog post.Kraken will not receive the wider range of ​privileges granted to banking institutions with a full master account.The account was approved for an initial one-year term, with services to be introduced in phases, starting with the ​support for institutional client ​activity at Kraken.Kraken’s Sethi hails Fed’s crypto approvalKraken and Payward Co-CEO Arjun Sethi praised the Fed's decision to grant his company Fedwire access."This ⁠milestone marks the convergence of crypto infrastructure and sovereign financial rails," Sethi told Reuters. "With a Federal Reserve master account, we ​can operate not as a peripheral participant in the ​U.S. banking ⁠system, but as a directly connected financial institution." Kraken Financial is the company's Wyoming-chartered bank, and Payward is the ⁠legal ​parent. Wyoming is considered a welcoming regulatory environment for crypto and other digital assets.Kraken was valued at $20 billion in its latest ​fundraising in November, and has been actively investing to expand into various asset classes and ​grow its user base.Fed’s Waller calls for payments innovationFed Governor Christopher Waller has supported the Fed’s efforts to adjust to the changes facing the central bank’s regulatory environment around crypto.“Payments innovation moves fast, and the Federal Reserve needs to keep up,’’ Waller said in an October 2025 speech.Waller said the idea is to tailor the services of these new accounts to the needs of these firms and the risks they present to the Fed and the payment system.“The upshot is that, in my view, the payments landscape, as well as the types of providers, has evolved dramatically in recent years, and, accordingly, a new payments account could better reflect this new reality,’’ Waller said.Related: A Record $17 Billion Estimated Stolen in Crypto Scams and Fraud in 2025