Trump Joins Crypto Fight as Banks Attack Kraken’s Fed Approval!

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Banks Respond to Kraken’s Federal Reserve Access as Trump Sides with Crypto

Kraken, a cryptocurrency exchange, recently gained permission to connect to the Federal Reserve’s main payment system, and this has caused strong criticism from traditional banks.

The Independent Community Bankers of America (ICBA) and the Bank Policy Institute (BPI) released a statement on Wednesday expressing strong disagreement with the Fed’s recent decision, claiming it could threaten the health of the financial system.

Banks Challenge Kraken’s Federal Approval

Shortly after Kraken announced it was the first cryptocurrency company to get a master account with the Federal Reserve, the Independent Community Bankers Association released a strongly worded statement criticizing the decision.

Allowing companies that aren’t traditional banks, including those dealing with cryptocurrency, to access the same master accounts as highly regulated banks could create risks for the entire banking system, according to ICBA CEO Rebeca Romero. She stated that the Federal Reserve should maintain its current policy of restricting access to these accounts to only the most financially sound institutions.

On its part, the BPI expressed concern over the decision-making process. 

As a researcher, I’m concerned that the Federal Reserve moved forward with this framework despite receiving public feedback, and without any clear explanation of how it was approved. Even more troubling, there’s been no disclosure of what steps are being taken to manage the substantial risks this framework introduces.

Kraken can now process US dollar payments directly through the Federal Reserve, similar to how many US banks and credit unions operate. This new capability lets them settle transactions without needing to go through other banks.

As expected, the Independent Community Bankers of America has expressed disapproval of the Kraken announcement.

— Katherine Ross (@byKatherineRoss) March 4, 2026

As a researcher following this development, it’s clear Kraken won’t have access to all the same perks as traditional banks when it comes to the Federal Reserve – for example, they won’t earn interest on reserves. Still, this approval feels like a really important win for the entire crypto industry, signaling growing acceptance and potential for future integration.

The conflict between banks and the cryptocurrency world, as seen with the issues surrounding Kraken’s approval, demonstrates a larger worry about how much influence crypto is gaining in traditional financial systems.

The Ongoing Battle Over Stablecoin Interest

As a researcher following the development of stablecoin regulation, I observed significant lobbying efforts from banks leading up to the GENIUS Act’s passage last July. They primarily argued that the bill, with its relatively loose regulations, could threaten the stability of traditional bank deposits – a concern they voiced repeatedly.

The worry was understandable. A Treasury Department report from last April suggested that stablecoins could potentially cause up to $6.6 trillion to leave traditional bank deposits.

Just one month after the GENIUS Act became law, five groups representing banks—including the Independent Community Bankers of America and the Bank Policy Institute—wrote to Congress asking them to fix a problem. This problem lets companies that issue stablecoins pay interest by working through exchanges.

This situation could also result in increased borrowing costs and make it harder for businesses and families to get loans.

The letter explained that without clear rules stopping exchanges from handling stablecoins issued by related companies, the GENIUS Act could be bypassed. This is because interest could be paid to stablecoin holders in a way that avoids the Act’s restrictions.

These disagreements are now affecting the debate around the CLARITY Act. The key issue is whether cryptocurrency exchanges should be allowed to provide returns on stablecoins, similar to interest.

As a researcher following the financial landscape, I’ve observed a recent shift where President Trump has publicly supported the cryptocurrency industry, which isn’t great news for traditional banks.

Trump Slams Banks for Stalling CLARITY Act

The president stated on Tuesday evening that American banks were working against the GENIUS Act and delaying the CLARITY Act.

In a recent post on Truth Social, Donald Trump argued that Americans deserve higher returns on their investments. He criticized banks for achieving record profits and warned that without the passage of the Clarity Act, a significant crypto initiative could benefit China and other countries.

This was the most direct involvement by the president so far in the debate about rewards earned from stablecoins.

As an analyst, I was hearing at the Milken Institute’s Future of Finance event that executives believed President Trump would delay taking a position in the stablecoin yield debate – the one between crypto and traditional banks – until after his fundraising efforts were complete, as he seemed to be benefiting from both sides. It looks like that prediction was premature! He’s clearly taken a side much sooner than anticipated.

— Eleanor Terrett (@EleanorTerrett) March 3, 2026

Donald Trump, with his family’s investments in various cryptocurrency businesses, is pushing Congress to approve new rules for the crypto market before the November elections. These elections could lead to Republicans losing control of both the House and Senate.

I recently learned that former President Trump met privately with Brian Armstrong, the CEO of Coinbase, at the White House. This information came to light just hours after POLITICO reported on the meeting.

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2026-03-04 22:21