US banking industry opposes Kraken's Fed master account approval

The U.S. banking industry has voiced opposition to the Federal Reserve's approval of a master account for crypto exchange Kraken, according to Eleanor Terrett, host of Crypto in America. The Independent Community Bankers of America (ICBA), which represents small U.S. banks, stated that providing master accounts to non-bank and crypto institutions—a privilege traditionally reserved for strictly regulated, insured depository institutions—could pose risks to the banking system. The Bank Policy Institute (BPI) pointed out that a Federal Reserve Bank made the decision before the Fed's Board of Governors initiated a formal public comment period. The BPI argued this violates the policy of seeking public input on significant changes to the payment system. Previously, Kraken's banking arm, Kraken Financial, had announced it received approval for a master account, which grants access to the Fed's core payment system.