Kraken Moves Into the Fed’s Inner Circle

Kraken, a crypto exchange that began in 2011, has taken a big step by gaining access to the Federal Reserve’s payment system. The move is part of its plan to mix blockchain with mainstream finance, a goal the company’s co‑CEO, Arjun Sethi, has been pushing since 2024. The new Fed account is not a grand scheme to overthrow banks, Sethi says. It simply lets Kraken’s users transfer money between its own products and hold collateral more easily. He notes that the account is still a pilot; full Fed services, like paying interest on reserves, are not yet available. Some bank lobbyists have criticized the decision, arguing that a “skinny” account should only be created after full approval from the Federal Reserve Board. Sethi counters that financial systems change constantly, and expanding access will inevitably spark debate.In addition to the Fed tie‑in, Kraken has teamed up with NASDAQ. The partnership deepens its link to traditional markets and lets crypto assets trade more smoothly on global exchanges. It follows a similar move by Intercontinental Exchange, which invested heavily in OKX. Sethi is realistic about the timeline for blockchain‑based stock trading. He thinks it will still be a while before most shares move on crypto rails, but tokenized stocks are already gaining traction in markets that lack easy access. He calls the current phase “infrastructure, ” and believes that once the groundwork is set, the user experience will improve quickly.