Key Takeaways:<\/p>\n
Kraken will become the first bank in the US to receive a master account from the Federal Reserve (Fed).<\/p>\n
This account will allow Kraken to make payments and they don\u2019t need to use middleman banks.<\/p>\n
This will help Kraken prepare for an IPO, which is valued at $20 billion.<\/p>\n
Kraken announced that the US Federal Reserve (Fed) gave them a master account. This will make Kraken become the first bank in the United States to have access to the government\u2019s payment system.<\/p>\n
A Long Path to Approval<\/p>\n
Kraken is a type of bank that was licensed in Wyoming, they are known as a Special Purpose Depository Institution (SPDI). It operates on a full-reserve, which means that it will keep 100% of customers\u2019 cash at all times.<\/p>\n
Kraken spent over five years. They worked with regulators in Wyoming and Washington D.C. They had to pass a lot of tests to prove that their operations were safe. This success is a big step for Kraken\u2019s parent company, Payward. The company is preparing for Initial Public Offering (IPO) with a market cap of $20 billion. They raised $800 million from investments such as Citadel Securities and Jane Street.<\/p>\n
Kraken will become the first bank in the US to receive a master account<\/p>\n
Why the Master Account Matters<\/p>\n
When Kraken has a master account,\u00a0it will allow Kraken to connect to Fedwire, the system that banks will use to move trillions of dollars every day. Kraken had to rely on banks to process their customers\u2019 cash transfers in the past. This was slow and expensive. Kraken can move money faster and cheaper because they removed the middleman. This means that they can trade between fiat and crypto immediately. It will reduce the risk of relying on third-party banks that can fail or change their rules. This will build a foundation for programmable finance, money moves based on smart rules, and they will follow government laws.<\/p>\n
A New Bridge Between Crypto and Finance\u00a0<\/p>\n
A crypto bank is treated as a Wall Street bank for the first time. This will create a powerful and reliable bridge between crypto and the US dollar. Institutional investors don\u2019t need to have to worry about the banking gap that caused a lot of problems in the past. Kraken can ensure that transfers move safely at any time.<\/p>\n
Read Next: Kraken Launches \u201cDeFi Earn\u201d on Ink L2, Integrating Aave to Offer 8% APY in Major CeFi-DeFi Push<\/p>\n","protected":false},"excerpt":{"rendered":"