JPMorgan and BofA backed group slams Fed's latest approval

Core Viewpoint - Kraken Financial has become the first crypto bank in U.S. history to gain direct access to the Federal Reserve's payment infrastructure following the approval of its master account by the Federal Reserve Bank of Kansas City [1]. Group 1: Master Account Details - A master account allows regulated depository institutions to maintain account balances at the central bank, enabling Kraken Financial to connect directly to U.S. payment systems like Fedwire without intermediaries [2]. - Kraken Financial's master account has limitations similar to "skinny" master accounts, meaning it cannot offer interest on reserves held at the central bank [3]. Group 2: Industry Concerns - U.S. banking groups have criticized the Federal Reserve's decision to grant a master account to a crypto bank, expressing concerns about the risks posed to the banking system [3][5]. - The Independent Community Bankers of America (ICBA) has raised concerns regarding the approval of Kraken Financial's master account [4]. - The Bank Policy Institute (BPI) has highlighted the risks associated with granting nonbank entities access to master accounts, emphasizing the need for stringent standards [5].