tl;dr
Cryptocurrency firms are striving to achieve legitimacy and infrastructure comparable to traditional banks amid a pro-crypto shift in US policy. Only two crypto-native institutions, Custodia Bank and Kraken Financial, hold full bank charters and have access to Federal Reserve master accounts, granti...
Cryptocurrency firms are intensifying efforts to secure legitimacy and infrastructure on par with traditional banks as the US adopts a progressively pro-crypto stance. At the center of this push, only two crypto-native institutions, Custodia Bank and Kraken Financial, hold full bank charters, positioning them uniquely to pursue coveted Federal Reserve (Fed) master accounts. These master accounts provide direct access to the Fed’s payment system, a privilege long denied to crypto firms.
Custodia Bank CEO Caitlin Long outlined a clear hierarchy in regulatory status: master accounts rank highest (Diamond), followed by banks (Platinum), trust companies (Gold), and money transmitters (Silver). Most crypto entities currently operate as trusts or money transmitters, underscoring the exclusivity of Custodia Bank and Kraken’s full bank charters. The Fed, meanwhile, defends its restrictive access policies in ongoing litigation initiated by Custodia Bank.
Ripple is attempting to gain Fed access by applying for a master account through its trust company acquisition, Standard Custody. However, a 2024 Wyoming court ruling reiterated the Fed’s broad discretion to deny master accounts, even to state-chartered banks, citing systemic risk and regulatory arbitrage concerns. This ruling clouds the prospects for OCC trust charters or SPDI status guaranteeing Fed access.
Despite regulatory uncertainty, new applications for Fed master accounts from groups like WisdomTree Digital Trust, Standard Custody, and Commercium Financial demonstrate continued optimism. This momentum is fueled by political calculations, including speculation that the Trump administration might mandate the Fed to open access to crypto firms via executive order, and increased crypto lobbying efforts. In 2024, crypto super PACs spent $136 million supporting pro-crypto candidates and continue their influence campaigns in 2025, exemplified by helping Democratic candidate James Walkinshaw win a historically crypto-skeptic district.
Currently, Kraken and Custodia hold the exclusive “Diamond” status with Fed master accounts, while others strive to climb the tiered ladder through alternative means—be it trust charters, litigation, or political lobbying. As the regulatory and political landscape evolves, Fed access remains the next critical frontier for crypto’s integration into mainstream financial infrastructure.