TechFlow News, April 10: According to a Reuters report, Kraken has become the first cryptocurrency exchange approved by the U.S. Federal Reserve for a master account. However, this account is restricted—allowing Kraken’s banking operations to access the Fedwire payment system and hold only limited balances, with no eligibility for interest earnings or emergency lending. This development has raised concerns in the U.S. financial system regarding risk and transparency, including a call from Maxine Waters, Chair of the House Financial Services Committee, for greater disclosure of account details. Regulatory experts warn that lightly regulated crypto firms gaining direct access to the Federal Reserve’s payment system could pose operational and financial stability risks. The Federal Reserve stated that these restrictions aim to mitigate liquidity shocks and credit risk; however, banks caution that they may impair liquidity across the banking system and exacerbate money laundering and operational vulnerabilities. Kraken stated that its bank reserves are fully backed and that it complies with bank-level anti-money laundering (AML) and customer identification requirements.
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