Coinspeaker
Mar 28, 2026 upd. 9 Jun

Waters demands Kansas City Fed justify Kraken master account approval

2 min

Waters challenges Kraken’s Fed access. She demands the legal basis by April 10.

U.S. Rep. Maxine Waters asked the Kansas City Fed to explain why it approved a Federal Reserve master account for Kraken Financial. She set an April 10 deadline for a written reply. Source: Coinspeaker.

Maxine Waters

Kraken says it’s the first crypto exchange with direct access to the Fed’s payment rails. The approval was confirmed on March 4, 2026. Kraken announcement.

The Kansas City Fed granted a “limited purpose account.” That label isn’t in the Federal Reserve Act or the Fed’s 2022 Account Access Guidelines. Waters wants the legal citation and the review process disclosed. Source: Coinspeaker.

Kraken Financial holds a Wyoming SPDI charter. It runs full‑reserve, no lending, and has no FDIC insurance. Kraken.

What Waters asked
- Does the account include Fedwire, FedACH, or cash services access
- Are there overdraft bans, balance caps, or enhanced supervision
- Did the Kansas City Fed coordinate with the Fed Board or other agencies

She also questioned the Fed’s refusal to disclose account‑holder details, citing public accountability. Source: Coinspeaker.

Context for investors
- Custodia (another Wyoming SPDI) lost its 2024 suit after a court upheld Fed discretion under 12 U.S.C. § 342 to deny non‑member banks master accounts. Source: Coinspeaker.
- Kraken’s access is structured as a one‑year pilot for a nonbank “grey area,” per Fed Vice Chair for Supervision Michelle Bowman. “We’re trying to learn.” Source: Coinspeaker.
- The Bank Policy Institute warned of insufficient transparency and risk mitigants, aligning traditional banks with Waters’ transparency push. Source: Coinspeaker.

Why it matters
- Direct Fed access cuts reliance on correspondent banks and speeds settlements for crypto flows. Kraken announcement.
- The “limited purpose” pilot may cap benefits while enabling Fedwire connectivity. Further policy clarity hinges on the Fed’s forthcoming “skinny” master account framework. Source: Coinspeaker.