Payward Financial’s Wyoming Special Purpose Depository Institution (SPDI), Kraken Financial, has received a master account from the Federal Reserve Bank of Kansas City, giving it direct access to the Federal Reserve’s core payment infrastructure. The approval, initially for a one-year term, allows Kraken Financial to connect directly to Fedwire and other Fed payment rails, a capability traditionally limited to insured financial institutions. As a general matter, digital assets, fintech and other firms that are not FDIC-insured have generally depended on correspondent banking relationships to move fiat funds over these payment rails.
According to Kraken Financial’s press release, the Federal Reserve’s authorization is structured as a limited-purpose master account, with conditions and restrictions tailored to its business model and risk profile. Kraken operates under Wyoming’s SPDI framework, which requires a full-reserve model with liquid assets equal to or exceeding client fiat deposits. The Federal Reserve has categorized Kraken Financial as a Tier 3 applicant under its tiered review framework for master accounts, a designation associated with eligible applicants that are not federally insured and thus subjected heightened scrutiny, and is only the third such applicant to have ever received approval.
As lawmakers and regulators continue to refine the post–Genius Act framework for stablecoins and tokenized deposits, this development signals a meaningful step in the convergence of crypto infrastructure with traditional payment systems, and may shape how banks, fintechs, and digital asset firms position themselves in future M&A, payments, and custody strategies.