Fed Approves Kraken's Master Account Qualification, Banking Organizations Express "Deep Concerns"

Odaily News The American banking industry has strongly opposed the Federal Reserve's approval of crypto institution Kraken Financial's qualification for a Master Account, arguing that this move could allow crypto institutions direct access to the Federal Reserve's payment system without the same regulatory safeguards as traditional banks.

A Master Account is a crucial gateway for financial institutions to access the Federal Reserve's clearing and payment network. This approval means Kraken Financial can directly utilize the payment infrastructure of the U.S. central bank.

The banking group Bank Policy Institute expressed "deep concern" over this decision, noting that it appears to have been made before the Fed has finalized its relevant policy framework. Currently, the Federal Reserve is still studying regulatory rules for so-called "skinny master accounts," which are typically aimed at financial institutions not engaged in traditional deposit and loan businesses.

The institute also criticized the lack of transparency in the approval process, stating that the public cannot understand the approval procedures and related risk mitigation measures.

Meanwhile, some crypto industry supporters believe this decision could open the door for more financial institutions focused on payment services but not operating under the traditional banking deposit-loan model, allowing them direct access to the core payment network of the U.S. financial system.