Overview
- Rep. Maxine Waters, in a Thursday letter to Kansas City Fed President Jeff Schmid, asked for written answers by April 10 on why Kraken’s banking unit was approved and what that access includes.
- Kraken Financial holds a restricted Federal Reserve master account that functions as a supervised one‑year pilot, giving direct use of Fed payment rails like Fedwire but excluding interest on reserves and discount‑window borrowing.
- The letter argues no law or the Fed’s Account Access Guidelines describe a “limited purpose account,” and it seeks specifics on services allowed, overdraft or balance caps, enhanced supervision, and AML and consumer‑protection reviews.
- The Kansas City Fed acknowledged the request and has cited applicant‑confidentiality rules for not releasing account details, as banking trade groups criticize the move for arriving before a finalized framework for restricted access.
- A master account lets an institution move money on the Fed’s networks without an intermediary bank, and Kraken is the first crypto firm to get this direct link, which could cut settlement delays and may spur more applications after past denials such as Custodia’s.