Banks Seek To Block Kraken’s Fed Approval, Label Crypto A ‘Potential Risk’

bitcoinistОпубліковано о 2026-03-05Востаннє оновлено о 2026-03-05

Анотація

Major US banking groups are opposing the Federal Reserve's decision to grant Kraken Financial, the crypto exchange's banking arm, a master account—the first ever given to a digital asset institution. While this "skinny" account allows Kraken to hold reserves and settle transactions in central bank money, it does not grant full banking powers like lending. Banking associations, including the ICBA, argue the approval was granted without proper public comment and that crypto poses a risk to financial stability. The move intensifies the existing legislative battle between banks and the crypto industry over stablecoin regulations and market structure bills, despite former President Trump's public support for crypto.

The Federal Reserve’s (Fed) decision this Wednesday to grant its first-ever master account to a crypto-focused institution has triggered swift opposition from major banking groups, intensifying tensions between traditional finance and the digital asset sector at a pivotal moment for US crypto legislation.

Opposition From US Banking Groups

Kraken Financial, the Wyoming-chartered banking arm of the exchange, announced that it had secured a Federal Reserve master account—becoming the first digital asset bank in American history to gain direct access to the central bank’s payment infrastructure.

However, the account comes with limitations. Under the so-called “skinny” master account framework outlined by Federal Reserve Governor Christopher Waller, Kraken is permitted to hold reserves and settle transactions in central bank money.

At the same time, it does not receive full banking authority. The firm cannot issue loans, tap into the Fed’s discount window, or function as a conventional commercial bank. In essence, it gains access to payment systems without the broader powers afforded to insured depository institutions.

Even with those restrictions, the move has drawn sharp criticism from the traditional banking industry. The backlash arrives as banks are already engaged in a broader fight over crypto-related legislation.

Industry groups have been pushing to remove the stablecoin rewards provision from the GENIUS Act—legislation that was signed into law by President Donald Trump last year.

That dispute has contributed to delays surrounding the passage of the wider crypto market structure bill known as the CLARITY Act. Now, leading US banking associations are publicly opposing the Federal Reserve’s approval of Kraken’s master account.

Alleged Risks In Expanding Crypto Access

According to Eleanor Terrett from Crypto In America, banking lobbyists argue that the Kansas City Federal Reserve “violated policy” by approving Kraken’s application without going through the customary public comment process.

The Independent Community Bankers of America (ICBA) has expressed strong objections, stating it is “very concerned” about granting crypto firms access to master accounts because it views the sector as a potential risk to financial stability.

Meanwhile, the Bank Policy Institute has accused the Kansas City Fed of effectively front-running the Federal Board’s public comment period and failing to follow established procedures when implementing what they characterize as a significant change to the US payments system.

In their view, granting nonbank entities and crypto institutions access to master accounts—historically limited to highly regulated, insured banks—introduces new vulnerabilities.

At the same time, President Trump has entered the debate. Addressing the legislative impasse surrounding the CLARITY Act, also known as the crypto market structure bill, Trump posted on Truth Social, expressing clear support for the crypto industry in its ongoing dispute with banks over stablecoin yield provisions.

He urged Congress to move swiftly in passing comprehensive crypto market structure legislation. Despite the President’s backing, banking groups remain unconvinced.

According to a banking source involved in negotiations who spoke to Crypto In America, concerns persist that “ambiguous legislative language” could enable crypto companies to bypass a prior agreement not to offer interest or yield on idle stablecoin balances.

“We want to continue negotiating, and what we’re trying to do is defend the agreement in-principle of no interest on balances, making sure no holes are punched in that,” the source said, adding that banks had sent proposed legislative revisions to the White House several days earlier but had not yet received a response.

The daily chart shows the total digital asset market cap at $2.45 trillion. Source: TOTAL on TradingView.com

Featured image from OpenArt, chart from TradingView.com

Пов'язані питання

QWhat is the significance of the Federal Reserve granting Kraken Financial a master account?

AIt marks the first time a crypto-focused institution has been granted direct access to the Federal Reserve's payment infrastructure, allowing it to hold reserves and settle transactions in central bank money.

QWhat are the main limitations of the 'skinny' master account granted to Kraken?

AKraken cannot issue loans, access the Fed's discount window, or function as a conventional commercial bank. It gains payment system access without the full powers of an insured depository institution.

QWhy are major US banking groups opposing the Federal Reserve's approval of Kraken's master account?

ABanking groups argue the Kansas City Fed violated policy by approving it without a public comment process and view crypto sector access as a potential risk to financial stability.

QHow has former President Donald Trump intervened in the crypto legislation debate mentioned in the article?

ATrump posted on Truth Social expressing clear support for the crypto industry in its dispute with banks over stablecoin provisions and urged Congress to pass comprehensive crypto market structure legislation.

QWhat specific concern do banking lobbyists have regarding stablecoin legislation according to the article?

AThey are concerned that 'ambiguous legislative language' could allow crypto companies to bypass a prior agreement not to offer interest or yield on idle stablecoin balances, potentially undermining the banking sector.

Пов'язані матеріали

Borrowing Money from a Hundred Years Later, Building Incomprehensible AI

Tech giants like Alphabet, Amazon, Meta, and Microsoft are undergoing a radical financial transformation due to AI. Their traditional "light-asset, high-free-cash-flow" model is being dismantled by staggering capital expenditures on AI infrastructure—data centers, GPUs, and power. Combined 2026 guidance exceeds $700 billion, a 4.5x increase from 2022, causing free cash flow to plummet (e.g., Amazon's fell 95%). To fund this, they are borrowing unprecedented sums through long-dated, multi-currency bonds (e.g., Alphabet's 100-year bond). The world's most conservative capital—pensions, insurers—is now funding Silicon Valley's most speculative bet. This shift makes these companies resemble heavy-asset industrials (railroads, utilities) rather than software firms, threatening their premium valuations. Historically, such infrastructure booms (railroads, fiber optics) followed a pattern: genuine technology, overbuilding fueled by competitive frenzy, aggressive debt financing, and a crash triggered by financial conditions—not technology failure. The infrastructure remained, but many original builders and financiers did not survive. The core gamble is a "time arbitrage": using cheap debt today to build scale and lock in customers before AI capabilities commoditize. They are betting that AI revenue will materialize before debt comes due. Their positions vary: Amazon is under immediate cash pressure; Meta's path to monetization is unclear; Alphabet has a robust core business buffer; Microsoft has the shortest path from infrastructure to revenue. The contract is set: the most risk-averse global capital has lent its time to Silicon Valley, awaiting a future that is promised but uncertain.

marsbit8 хв тому

Borrowing Money from a Hundred Years Later, Building Incomprehensible AI

marsbit8 хв тому

The 'VVV' Concept Soars 9x in Half a Year, The New AI Narrative on Base Chain

"The article explores the 'VVV' concept as the new AI-focused narrative within the Base ecosystem, centered around the token $VVV of the privacy-focused, uncensored generative AI platform Venice, led by crypto veteran Erik Voorhees. Venice has seen significant growth in 2026, with its API users surging, partly attributed to exposure from OpenClaw. The platform now boasts over 2 million total users and 55,000 paid subscribers. Correspondingly, the $VVV token price has risen over 9x this year. Key to its performance are tokenomics designed for value accrual: reduced annual emissions, subscription revenue used for buyback-and-burn, and a unique staking mechanism. Staking $VVV yields $sVVV, which can be used to mint $DIEM tokens. Each staked $DIEM provides a daily $1 credit for using Venice's API services, creating tangible utility. The article also highlights other tokens associated with the 'VVV' narrative. $POD, the token of distributed AI network Dolphin (which co-developed Venice's default AI model), saw a massive price surge. $cyb3rwr3n, a project for a Venice credit auction market, gained attention due to perceived connections to Venice's team despite official denials. Finally, $SR of robotics platform STRIKEROBOT.AI rose after announcing a partnership with Venice for robot vision-language model development. Overall, the 'VVV' ecosystem combines AI platform growth, deflationary tokenomics, and innovative utility mechanisms, driving significant investor interest and price action in related tokens."

marsbit17 хв тому

The 'VVV' Concept Soars 9x in Half a Year, The New AI Narrative on Base Chain

marsbit17 хв тому

Anthropic and OpenAI Have Single-Handedly Severed the Logic of Pre-IPO Stock Tokenization

The pre-IPO stock token market is experiencing significant turmoil following strong statements from AI giants Anthropic and OpenAI. Both companies have updated their official policies, declaring that any transfer of their company shares—including sales, transfers, or assignments of share interests—without prior board approval is "invalid" and will not be recognized in their corporate records. This means buyers in such unauthorized transactions would not be recognized as shareholders and would have no shareholder rights. A major point of contention is the use of Special Purpose Vehicles (SPVs), which are legal entities commonly used by pre-IPO token platforms to pool investor funds and indirectly acquire shares from employees or early investors. The companies explicitly state they do not permit SPVs to acquire their shares, and any such transfer violates their restrictions. They warn that third parties selling shares through SPVs, direct sales, forward contracts, or stock tokens are likely engaged in fraud or are offering worthless investments due to these transfer limits. This stance directly threatens the core model of many pre-IPO token platforms, which rely on SPV structures. The announcement revealed additional risks within this model, such as complex "SPV-within-SPV" layering that obscures legal transparency, increases management fees, and creates a chain reaction risk of invalidation. Following the news, tokens like ANTHROPIC and OPENAI on platforms like PreStocks fell sharply (over 20%). The market reaction highlights a divergence: while asset-backed pre-IPO tokens plummeted, purely speculative pre-IPO futures contracts, which are bilateral bets on future IPO prices with no claim to actual shares, remained relatively stable as they are unaffected by the transfer restrictions. The industry is split on the implications. Some believe the fundamental logic of pre-IPO token trading is broken if leading companies reject SPV-held shares, potentially causing a domino effect. Others, like Rivet founder Nick Abouzeid, argue that buyers of such unofficial tokens always knowingly accepted the risk of non-recognition by the company. The statements serve as a stark risk warning and a corrective measure for a market where valuations for some AI-related pre-IPO tokens had soared to irrational levels, far exceeding recent funding round valuations.

marsbit1 год тому

Anthropic and OpenAI Have Single-Handedly Severed the Logic of Pre-IPO Stock Tokenization

marsbit1 год тому

Anthropic and OpenAI Personally Sever the Logic of Pre-IPO Crypto-Stocks

The pre-IPO token market has been rocked by strong statements from Anthropic and OpenAI. Both AI giants have updated official warnings, declaring that any sale or transfer of their company shares without explicit board approval is "invalid" and will not be recognized on their corporate records. This directly targets Special Purpose Vehicles (SPVs), the common legal structure used by pre-IPO token platforms. These platforms typically use an SPV to acquire shares from employees or early investors, then issue blockchain-based tokens representing a claim on the SPV's economic benefits. Anthropic and OpenAI's position means that if an SPV's share purchase lacked authorization, the underlying asset could be deemed worthless, nullifying the token's value. Anthropic explicitly warned that any third party selling its shares—via direct sales, forwards, or tokens—is likely fraudulent or offering a valueless investment. The crackdown highlights risks in the popular SPV model, including complex multi-layered "Russian doll" SPV structures that obscure legal ownership, add fees, and concentrate risk. If one layer is invalidated, the entire chain could collapse. Following the announcements, tokens like ANTHROPIC and OPENAI on platforms like PreStocks fell sharply (over 20%). In contrast, purely speculative pre-IPO prediction contracts remained stable, as they involve no actual share ownership. The move is seen as a corrective measure amid a market frenzy where some pre-IPO token valuations (e.g., Anthropic's token hitting a $1.4 trillion implied valuation) far exceeded recent official funding rounds. Opinions are split: some believe this undermines the core logic of pre-IPO token trading if top companies reject SPVs, while others argue buyers always assumed this legal risk when accessing unofficial channels. The statements serve as a stark warning and a potential catalyst for market de-leveraging and clearer boundaries.

Odaily星球日报1 год тому

Anthropic and OpenAI Personally Sever the Logic of Pre-IPO Crypto-Stocks

Odaily星球日报1 год тому

The Waged Worker Driven to Poverty by AI Subscriptions

"AI Membership: The Hidden Cost Pushing Workers Toward 'Poverty'" The widespread corporate push for AI adoption is creating a hidden financial burden for employees. Companies, from giants like Alibaba to small firms, are mandating AI use, often tying token consumption to KPIs, but frequently refuse to cover the costs. Workers are forced to pay for subscriptions out of pocket to stay competitive and avoid being replaced. Front-end developer Long Shen spends up to 2000 RMB monthly on tools like Cursor and ChatGPT Plus, seeing it as a necessary 3% salary investment to handle 90% of his coding tasks. While it boosted his performance and led to promotions, he now faces idle time at work, pretending to be busy. Designer Peng Peng navigates strict company firewalls by using personal devices and accounts for AI image generation tools like Midjourney, spending hundreds monthly without reimbursement, while her boss demands faster, more numerous revisions. The pressure creates workplace anxiety and suspicion. Programmer Li Huahua, after a friend's experience of raised KPIs following AI success, fears being branded a "traitor" for using it yet worries about falling behind if she doesn't. The dynamic allows management to demand results without understanding the tools or covering expenses, treating employees like AI "agents." While some, like entrepreneur Jin Tu, find high value in paid AI, building entire systems and winning competitions, for most, it's a trap. Free tools like Kimi and Doubao are introducing fees, closing off alternatives. The initial efficiency gains individual advantage, but as AI becomes ubiquitous, the personal edge disappears, workloads increase, and a cycle of dependency begins. Workers like Long Shen realize they cannot maintain AI-generated code without AI, making stopping harder than continuing to pay. The tool promising liberation is instead becoming a compulsory, costly chain in the modern workplace.

marsbit2 год тому

The Waged Worker Driven to Poverty by AI Subscriptions

marsbit2 год тому

Торгівля

Спот
Ф'ючерси
活动图片