House of Representatives Representative Maxine Waters pressed the Federal Reserve Bank of Kansas City for its approval of Kraken’s “limited purpose account”, expressing concern about the implications of giving the crypto company access to the Federal Reserve (Fed) payment system.
Rep. Waters Seeks Clarity on Kraken Master Account Approval
On Thursday, Representative Maxine Waters, the top Democrat on the House Financial Services Committee, sent a letter to Jeff Schmid, President and CEO of the Federal Reserve Bank of Kansas City, questioning the Kansas City Fed’s recent decision to approve a “limited purpose account” for the second largest crypto exchange in the US, Kraken.
In the letter, Waters sought clarification from the Kansas City Fed about the implications of this authorization “at a time when Congress has debated whether to expand access to the Fed’s payment methods and on what terms.”
Rep. Waters' letter to Kansas City Fed's President Jeff Schmid. Source: House Financial Services Committee
Notably, Kraken Financial, the banking arm of Kraken, made history as the first crypto company to gain direct access to the Federal Reserve’s primary payment system. This achievement was achieved after Kraken received approval from the Kansas City Fed for a large Fed account earlier this month.
As reported by Bitcoinist, the approval of the main account will allow Kraken Financial to speed up and direct transactions to its large customers and professional traders. Additionally, it will give Kraken’s banking unit direct access to Fedwire, a popular payment system among banks that handles more than $4 billion in daily transactions.
The milestone represents a significant victory for the crypto industry, which was repeatedly denied access to the Federal Reserve system for years. Previously, the company relied on intermediary banks to facilitate transfers to other firms.
The attorney emphasized that giving a cryptocurrency company strict access to the Federal Reserve’s payment system for the first time raises concerns of policy, control, and consumer protection, arguing that it is mainly concerned with the rapid speed at which the creation of funds bypasses the rules and safeguards designed to ensure the safety of the financial system.
The Kansas City Fed’s announcement did not disclose specific information about Kraken’s access to the Federal Reserve’s financial services list “due to the confidentiality of business information provided by applicants.” However, the announcement raises questions about approval because neither the law nor the Federal Reserve Board’s Account Access Guidelines refer to the type of ‘limited purpose account’.
Crypto Access to Fed’s Payment Rails Faces Resistance
Representative Waters emphasized that access to the nation’s payments infrastructure is an important public responsibility and should not be expanded without full transparency, a clear legal basis, and assurance that risks will be properly managed.
Therefore, you requested information by April 10, 2026, about the Federal Reserve services that Kraken can access now, the conditions or limitations that apply, and the prudential, anti-money laundering (AML), and consumer protection considerations that are weighed before proceeding with approval.
The attorney’s letter comes as banking groups have expressed serious concerns about giving crypto and fintech companies direct access to the Federal Reserve’s payment systems. Traditional banks have warned that even limited access could pose a serious threat to the US payments system and overall financial stability.
In context, Kraken’s limited access to the main account is similar to the “skin” main account concept originally proposed by the Federal Reserve Board of Governors in October 2025.
This type of restricted account will allow fintech payment companies and crypto companies to access the Federal Reserve payment systems. However, it will exclude other benefits that are more closely related to banks, such as the discount window for mortgages.
In addition, the Office of the Comptroller of the Currency (OCC) approved conditional bank charters for Ripple, Circle, BitGo, Paxos, and Fidelity in December, raising concerns that it could blur the lines between banking activities and lead to regulatory arbitrage.
Last month, the American Bankers Association (ABA) urged the central bank regulator to postpone the approval of applications for crypto bank charters, suggesting that the agency should wait until the regulatory uncertainty is resolved.
Total crypto market capitalization is at $2.27 trillion in the one-week chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, Chart from TradingView.com
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