Following the Federal Reserve's granting of the Kraken master account, banking organizations expressed "deep concern."

PANews reported on March 5th that, according to The Block, following the Federal Reserve's approval of the master account application for cryptocurrency exchange Kraken, US banking organizations have expressed strong opposition, warning that this move could allow crypto institutions to access the central bank's payment system without the same regulatory safeguards as traditional banks. The Banking Policy Institute expressed "deep concern," arguing that the Kansas City Fed approved the application before the Fed finalized its limited-use master account policy framework, and that the approval process lacked transparency. The Independent Community Bankers Association also stated that allowing non-bank entities and crypto institutions access to master accounts poses a risk to the banking system. Federal Reserve governors stated last month that they hope to introduce a streamlined account structure later this year. Some crypto market participants believe that Kraken's approval signals a breakthrough in establishing non-deposit banking operations that do not rely on loans.

Earlier yesterday, it was reported that Kraken had been approved for a "simplified" Fed master account, becoming the first crypto company to be granted access to the Federal Reserve's core payment system, Fedwire.