Kraken has won access to the Fed’s core payment systems, making it the first crypto firm to be able to move money on the same rails used by banks and credit unions. What does this mean exactly ? In essence it means that Kraken can now use the same banking rails as traditional banks, being able to settle on “fedwire” cutting out the need for a banking “middleman” to settle transactions into fiat.
Whilst this won’t materially affect the experience of retail customers, it most certainly will up Kraken’s efficiency to institutional clients and up its attractiveness as an institutional player due to the following benefits:
- Faster fiat deposits/withdrawals (no intermediary banks)
- Lower costs & operational risks
- Quicker settlements for institutions & large traders
- Better liquidity integration between crypto & traditional finance
This is a big milestone not only for kraken but for the whole industry, as the once “choked” industry that became the victim of much SEC “lawfare” edges ever closer to playing by the same rules as the big institutional banks.
