Kraken’s Fed Master Account Still Isn’t Live

Kraken was the first crypto bank to win direct Fed access in March, but the rollout is still moving slowly. The delay is a reminder of how strict U.S. payment infrastructure requirements remain.

Key Takeaways

• Kraken Financial's Federal Reserve master account is still not operational, more than four months after approval.
• The crypto company is working on rolling out the account and is still using an intermediary bank for dollar transfers for now.
• The approval was unusual, but it was only valid for one year and came with undisclosed limits.

Kraken Financial's Federal Reserve master account still has not gone live, even though the bank received approval more than four months ago. CEO Brian Mathena said the company is still working to bring the account online, underscoring how difficult direct access to the U.S. payment system remains for crypto firms.

Account Still Not Operational

Mathena told Wyoming lawmakers last week that Kraken is still trying to make the account “operational” while it continues rolling out its deposit product. The bank received approval from the Federal Reserve Bank of Kansas City on March 4, after an application process that began in October 2020.

The approval was a milestone: Kraken became the first crypto firm to get direct access to the Fed. Even so, the account is still not active. Kraken had already said the launch would happen in stages, beginning with large institutional clients. For dollar transfers, the company is still relying on an intermediary bank, while Dart Bank remains the U.S. dollar wire provider, according to its own support pages.

Kraken is also pursuing more banking licenses outside the U.S. As part of that broader push, the company wants to secure a European banking license through Lithuania and expand its network of financial licenses worldwide.

Strict Fed Conditions

The approval also came with strings attached. It is valid for only one year and includes undisclosed limits designed around Kraken's risk profile. That lines up with the Fed's strict Tier 3 review, which applies to state-chartered banks without federal insurance or a federal regulator. In that category, approvals are exceptionally rare.

Fed Vice Chair Michelle Bowman has previously described that third tier as nearly “unobtainium.” The data supports that view: according to fintech analyst Jason Mikula, only three of the 53 Tier 3 or unclassified applicants have ever been approved. The other two were a cooperative bank in Puerto Rico and Numisma Bank, and neither had any crypto activity.

Why This Matters for European Readers

For European crypto readers, the bigger point is that access to traditional payment rails still depends heavily on oversight, licensing, and operational readiness. Kraken's case also comes as the Fed continues working on new rules for nonbanks, while other firms like Custodia Bank have been caught in the same process for years. That makes this pilot worth watching for anyone following how far crypto companies can push into the U.S. financial system.