U.S. banking industry strongly opposes Kraken's access to the Federal Reserve, Trump angrily accuses of obstructing crypto agenda

Cryptocurrency exchange Kraken has become the first crypto company to obtain a main account with the Federal Reserve, allowing it to settle U.S. dollar transactions directly through the Fed; the Independent Community Bankers of America (ICBA) and the Bank Policy Institute (BPI) immediately issued strong opposition statements, while President Trump publicly accused banks of obstructing cryptocurrency legislation progress.

Kraken’s Federal Reserve Main Account: Banking Industry Claims It Threatens Financial Stability

(Source: ICBA)

Kraken becomes the first crypto company directly connected to the Federal Reserve’s core payment infrastructure, meaning it can settle U.S. dollar transactions directly through the Fed, effectively bypassing traditional intermediary banks. However, Kraken has not received all the benefits that traditional banks enjoy from the Fed, such as reserve interest.

Hours after the announcement, ICBA CEO Rebeca Romero issued a statement: “Allowing non-bank entities and crypto firms to use main accounts traditionally limited to highly regulated depository institutions poses risks to the banking system.” BPI criticized the Fed for “ignoring the public consultation process previously required for this framework,” and for a lack of transparency in approval procedures and risk mitigation measures.

Stablecoin Interest Dispute: Structural Concerns Over $6.6 Trillion in Deposits Outflow

The banking industry’s resistance to Kraken’s main account is the latest chapter in broader regulatory debates. In April last year, a U.S. Treasury Department report estimated that stablecoins could lead to a deposit outflow of up to $6.6 trillion. One month after the passage of the GENIUS Act, five banking associations, including ICBA and BPI, jointly wrote to Congress urging to close regulatory loopholes that allow stablecoin issuers to pay interest indirectly through exchanges, warning that such actions could increase borrowing costs and reduce credit for businesses and households.

Currently, the core controversy surrounding the CLARITY Act centers on whether cryptocurrency exchanges can offer returns similar to interest on stablecoins. Trump publicly stated on Truth Social: “Americans should let their money earn more. Banks are creating historic profits, and we will not allow them to undermine our strong crypto agenda, or else cryptocurrencies will eventually flow to China and other countries.”

Key Disputes Between Banking Industry and Trump’s Crypto Agenda

Kraken’s Main Account: First crypto firm connected to Fed payment infrastructure; ICBA and BPI claim it poses stability risks and lacks transparency in decision-making

Stablecoin Deposit Risks: Treasury estimates stablecoins could cause $6.6 trillion in deposit outflows from traditional banks

GENIUS Act Loophole: Banking groups urge banning exchanges from indirectly paying interest to stablecoin holders

CLARITY Act Controversy: Whether crypto exchanges can provide interest-like returns remains a key unresolved issue

Trump’s Public Stance: Accuses banks of obstructing crypto agenda, posts after private meeting with Coinbase CEO Brian Armstrong at the White House

FAQs

What is the significance of Kraken obtaining a Federal Reserve main account?

A Fed Main Account allows the holder to settle U.S. dollar transactions directly with the Federal Reserve, a privilege previously limited to highly regulated depository institutions. Kraken becoming the first crypto company with this access means it can directly connect to the U.S. payment system shared by thousands of banks and credit unions, bypassing intermediaries, reducing settlement costs and times, and marking a major step for cryptocurrencies entering traditional financial infrastructure.

Why are U.S. banks concerned about the development of stablecoins, and is there evidence?

Banks’ main concern is deposit outflow—if users transfer funds into interest-bearing stablecoins, traditional bank deposits could shrink significantly. The Treasury estimates this could be as much as $6.6 trillion, which would weaken banks’ lending capacity, raise borrowing costs, and impact credit availability for businesses and households. These concerns are documented in the joint letter from five banking associations.

What are the political motives behind Trump’s strong involvement in crypto legislation disputes?

The Trump family holds stakes in several crypto companies, and his push for the CLARITY Act to pass before the midterm elections in November is clear—these elections could shift control of Congress. After a private meeting with Coinbase CEO Brian Armstrong at the White House, Trump posted on Truth Social his strongest stance on crypto to date, indicating this is both a policy position and a politically motivated move ahead of the elections.