Maxine Waters Questions Transparency Around Kraken Master Account Approval

Highlights:

• Maxine Waters has questioned how Kraken received approval to access the Federal Reserve payment system.
• The Kraken Master Account gives the crypto firm direct access to Fed payment rails used by banks.
• Banks have challenged the decision, stating that regulators have not set clear rules for such approvals.

Maxine Waters, a ranking member of the House Financial Services Committee, has asked the Federal Reserve Bank of Kansas City to explain its approval of Kraken Financial’s master account. She said the decision allows a crypto-linked firm to access the Federal Reserve’s payment system without a clear legal basis. Moreover, she questioned whether existing laws permit this type of account.

Rep. Waters presses Kansas City Fed on approving Kraken’s master account

Waters argues that access to critical financial infrastructure should not be granted without full transparency. pic.twitter.com/shVSJ2D93r

— Review Trading (@ReviewTrading11) March 27, 2026

Waters sent a letter to Kansas City Fed President Jeff Schmid and set a 10 April deadline for a response. She asked which officials approved the account and whether the Federal Reserve Board or other agencies reviewed the decision. She also asked which anti-money-laundering checks and consumer protection standards regulators applied before granting access.

Waters stated that no federal statute defines a limited-purpose master account. She also said the Federal Reserve’s Account Access Guidelines do not mention such an account type. Maxine Waters stated, “The announcement raises questions about the approval because no statute or Federal Reserve guidelines define a limited purpose account.”

She added that the Kansas City Fed has not disclosed key details about Kraken’s access. The bank said it cannot share information because of confidentiality rules tied to applicants. However, Waters said the Federal Reserve must explain how it grants access to its payment system.

She also asked how regulators will supervise Kraken’s account after approval. In addition, she asked what controls the Fed will use to enforce compliance. She warned that digital assets, tokenization, and artificial intelligence are advancing faster than financial regulation.

Kraken Master Account Opens Door to Fed Payment System

Kraken Financial secured a limited-purpose master account from the Federal Reserve Bank of Kansas City earlier this month. This account allows Kraken to connect directly to the Federal Reserve’s payment system. It gives the firm access to infrastructure used by banks and credit unions.

JUST IN: 🇺🇸 Kraken becomes the first crypto exchange to gain access to the Federal Reserve's core payments system. pic.twitter.com/tSpJbXLE0z

— Watcher.Guru (@WatcherGuru) March 4, 2026

The account can support transactions through Fedwire, which handles high-value dollar transfers. This access allows Kraken to move funds without relying on intermediary banks. As a result, institutional clients can receive faster deposits and withdrawals.

The account does not grant full central bank privileges. Kraken cannot earn interest on reserves held at the Federal Reserve. The Fed can also set limits on balances, overdrafts, and transaction activity. These restrictions define the account as limited-purpose. Kraken Co-CEO Arjun Sethi said the approval connects crypto infrastructure with the traditional financial system. He said the decision shows how digital asset platforms can operate within established payment networks.

Waters asked the Fed to explain what services Kraken can access. She asked whether the account includes Fedwire, FedACH, or cash services. She also asked whether regulators placed limits on balances or overdrafts. Custodia Bank, Anchorage Digital Bank, and Ripple have all sought similar access to such accounts. Kraken now stands as one of the few crypto firms with direct access to the Federal Reserve infrastructure.