ChainThink report, March 4: Cryptocurrency journalist Eleanor Terrett posted on social media stating that "Kraken, the second-largest crypto exchange in the United States, has just accomplished something no other crypto company has done before—obtaining critical access eligibility from the Federal Reserve. Kraken Financial, a banking division of Kraken, has received approval from the Federal Reserve Bank of Kansas City to establish a primary account with the Federal Reserve. This marks the first time a native cryptocurrency company has gained (albeit limited) direct access to the Federal Reserve’s payment system. The approval comes after over five and a half years since Kraken submitted its application to the Federal Reserve Bank of Kansas City in October 2020."

This account enables Kraken to directly interface with the Federal Reserve’s payment system, but does not grant access to Federal Reserve lending facilities. The company can hold reserves and settle transactions using central bank funds, but it cannot extend loans, utilize discount window facilities, or operate as a traditional commercial bank.

According to sources, Kraken’s approval is considered a "pilot" initiative designed to test this new model. This development holds historic significance for the crypto industry, long excluded from the traditional banking system, and signals a potential shift in the Federal Reserve’s stance. The move could trigger a wave of applications from other crypto firms seeking primary accounts at the Federal Reserve. Custodia Bank, Anchorage, and Ripple’s U.S.-based banking partner have already filed applications for primary accounts.