Kraken Secures Fed Master Account, Sets Stage for $20 Billion IPO Competition
Kraken became the first US crypto exchange to secure a Federal Reserve master account, granting direct Fedwire access for dollar settlements without intermediaries but without interest on reserves or emergency lending. This move precedes Kraken’s planned IPO at a $20 billion valuation and may intensify competition for Coinbase.
1. Kraken Secures Fed Master Account
Kraken became the first US crypto exchange to receive a Federal Reserve master account on March 4, gaining the ability to settle dollar transactions directly on Fedwire. The approval excludes interest earnings on reserves and access to the Fed’s emergency lending facilities.
2. Competitive Impact on Coinbase
This Fed master account enables Kraken to bypass intermediary banks for dollar settlements, potentially reducing costs and settlement times. Direct Fedwire access may intensify competition for Coinbase, which currently relies on correspondent banking relationships for USD transactions.
3. IPO and Valuation Landscape
The approval arrives as Kraken prepares for an IPO with a $20 billion valuation based on an $800 million funding round. Kraken handled $1.99 billion in trading volume over the past 24 hours, ranking second among US exchanges behind Coinbase’s $3.35 billion.