Kraken’s Fed account approval remains stalled before launch

The Federal Reserve Bank of Kansas City approved a limited-purpose account in March for Payward Financial, which operates as Kraken Financial, giving the crypto-focused Wyoming special purpose depository institution a rare opening into the Fed’s payments system. The account has not yet gone live, Kraken Financial Chief Executive Brian Mathena told Wyoming lawmakers, leaving unresolved how much practical access the firm will receive.

Mathena said Kraken is “now playing a bit of catch up” as it works to make the account operational and broaden its deposit product. His comments show that formal approval is only one stage in obtaining useful central-bank payments access, particularly for institutions outside the federally insured banking system.

The Kansas City Fed described Kraken’s arrangement as a one-year, limited-purpose account with restrictions based on the company’s business model and risk profile. Services were set to be introduced in stages, starting with activity tied to institutional clients.

Approval does not guarantee full payments access

A Federal Reserve account can allow an institution to hold balances in central-bank money and, depending on authorizations, use services such as Fedwire, FedACH and the FedNow Service. Those capabilities require operational steps beyond the approval decision, including technical certification, settlement procedures, liquidity controls, compliance systems, transaction monitoring, contingency planning and approval for particular use cases.

Kraken’s case sits within the Fed’s tiered framework for account access. Tier 3 applicants, which lack federal deposit insurance and federal prudential supervision at the institution or holding-company level, face the most demanding review. Fintech Business Weekly reported that of 53 Tier 3 or “TBD” tier applicants, three have been approved: Kraken Financial, Numisma Bank and the Cooperativa de la Autoridad de Carreteras y Obras Públicas, a Puerto Rico-chartered institution.

Federal Reserve Vice Chair for Supervision Michelle Bowman addressed the difficulty of Tier 3 access at an American Bankers Association conference in March, describing it as “unobtainium” and characterizing the Kraken arrangement as a pilot for examining how some nonbanks might connect to the Fed system.

A pilot account gives the central bank a way to test connections and controls while limiting the range of permitted activity. For Kraken, that structure means the account may begin with narrower institutional payments rather than the broader utility associated with a conventional master account.

Crypto banking ambitions meet regulatory limits

The outcome matters for crypto firms seeking more direct banking infrastructure and for banks, credit unions and corporate treasuries weighing digital-asset products. PYMNTS Intelligence’s June Credit Union Tracker Series, produced with Velera, found that 70% of credit union members have limited awareness of stablecoins.

PYMNTS Intelligence’s 2026 Certainty Project also reported caution among middle-market companies. According to that research, 13% of firms use stablecoins and 5% use other cryptocurrencies.

Other crypto banking executives have described a broader push to embed digital-asset services into regulated finance. Anchorage co-founder and Chief Executive Nathan McCauley told PYMNTS in April that he wants “every bank to become a crypto bank,” adding that in a market of 4,000 banks, Anchorage aimed to power 3,999 of them.

Kraken’s approval remains a significant regulatory marker for Wyoming’s special purpose depository institution model. Its commercial effect will depend on which Fed services the firm is allowed to use, when the account becomes operational and whether it can reduce reliance on partner banks for activities outside the approved scope.

This story draws on original reporting from PYMNTS.