Why are banks unhappy with the Fed's decision on the crypto bank Kraken?
This week, the cryptocurrency exchange and fintech company Kraken received the long-awaited master account from the Federal Reserve System of the United States. This means that Kraken can now directly store funds and make payments through the Federal Reserve system, just like regular banks.
However, this decision has sparked harsh criticism from traditional banks and banking associations. They argue that granting Kraken bank status and access to key financial infrastructure is an inappropriate and dangerous step.
The main complaints from the banking sector:
- Kraken is a cryptocurrency exchange, not a full-fledged bank, so it is not subject to the same strict regulation and oversight as regular banks.
- Crypto assets themselves carry high risks to financial stability, and providing cryptocurrency exchanges access to the banking infrastructure can threaten the entire system.
- The Federal Reserve's decision gives cryptocurrency exchanges undue advantages over traditional banks and blurs the lines between the banking and non-banking sectors.
From the experts' point of view, this decision does raise legitimate concerns. The cryptocurrency sector is still in a stage of formation, and the integration of cryptocurrency exchanges into the banking system can lead to unpredictable consequences. At the same time, it also signals the growing recognition of the crypto industry by regulators.
In any case, the Federal Reserve's approval of Kraken as a bank is likely to become an important milestone in the development of the entire crypto economy. But it is obvious that this step will require careful monitoring and regulation by the financial authorities to minimize the risks to the stability of the financial system.