The post Lawmaker Presses Kansas City Fed Over Kraken appeared on BitcoinEthereumNews.com.

U.S. Representative Maxine Waters (D-CA), the ranking Democrat on the House Financial Services Committee, has formally demanded that the Federal Reserve Bank of Kansas City explain its legal basis for approving a Federal Reserve master account for Payward Financial, the entity doing business as Kraken Financial, marking the first time a crypto exchange has secured direct access to the Fed’s core payment infrastructure. In a letter transmitted Thursday to Kansas City Fed President Jeff Schmid, Waters requested a written response by April 10, citing transparency deficiencies and the absence of any statutory or regulatory basis for the regional bank’s account classification. The approval, which the Kansas City Fed confirmed on March 4, 2026, was structured as a “limited purpose account” — a designation that appears in neither the Federal Reserve Act nor the Federal Reserve Board’s Account Access Guidelines. We suspect the Waters inquiry signals something larger than a single account approval: it reflects Democratic lawmakers’ determination to assert congressional oversight over a regulatory posture that has visibly shifted toward accommodation since the change in administration. Crypto-native banks and exchange operators with pending master account applications would be mistaken to treat this as routine oversight noise. EXPLORE: Top Crypto Exchanges for Leverage Trading Kraken Master Account: Inside Waters’ Congressional Inquiry A Federal Reserve master account grants its holder direct access to the Fed’s payment rails, principally Fedwire Funds Service for high-value real-time gross settlement and FedACH for batch retail transfers, without routing through an intermediary correspondent bank. For a crypto exchange like Kraken, that operational shift is material: it eliminates the counterparty dependency on traditional banking intermediaries, accelerates settlement finality, and reduces the structural vulnerability that has made crypto firms targets of debanking pressure over the past several years. Kraken Financial holds a Wyoming Special Purpose Depository Institution (SPDI) charter, operates…

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Filed under: News - @ March 28, 2026 10:28 am