Kraken may play second fiddle to Coinbase in the U.S., but the crypto exchange has been on a tear as it prepares for a potential initial public offering. In just the past two weeks, Kraken has announced its groundbreaking approval for a limited purpose Federal Reserve master account, as well as a new partnership with NASDAQ to offer tokenized stocks. In the latest episode of Fortune’s Crypto Playbook podcast—available on Spotify, Apple, and YouTube—co-CEO Arjun Sethi explained why Kraken’s goal isn’t to disrupt the banking system. “It’s to make the plumbing of the financial system safer and more efficient,” he said.
Founded in 2011, Kraken is one of the longest-tenured crypto companies in the U.S. Sethi, who cofounded the venture capital firm Tribe Capital, has served as the CO-CEO of the exchange since 2024. In the role, he has helped spearhead the company’s push into merging blockchain technology with traditional finance. That has included the 2025 launch of xStocks, which provides traders with tokenized versions of stocks and ETFs like Tesla and Apple.
Sethi says Kraken’s recent developments will help propel the company’s vision of reshaping the rails of global finance. As other crypto companies race for Fed master accounts, Kraken became the surprising first recipient thanks to its Wyoming-chartered bank. Sethi argued that Kraken’s new access to the Fed’s payment systems will help the exchange’s customers move assets across its different products and store collateral. And while Kraken has not yet been granted the full range of Fed services, including the payment of interest on reserves, Sethi expressed optimism that would change. “I’ve never heard of a Fed master account being a pilot,” he said.
The decision to grant Kraken access has been met with criticism from bank lobby groups, who argued that the new type of “skinny” account should have been finalized by the Federal Reserve Board. “It’s important to remember that financial infrastructure is evolving over time,” Sethi said. “Any time access to core systems expands…there’s going to be a debate.”
Kraken’s new partnership with NASDAQ represents even more integration with the traditional financial system right after its competitor, the Intercontinental Exchange announced a massive investment into the crypto exchange OKX. “The goal is not to bypass the exchange or market rules,” Sethi said. “It allows those assets to operate in more continuous and globally accessible financial systems.”
Sethi said the day where most major stocks are traded on blockchain rails is likely not around the corner. Still, he said that in global markets where access is more limited, tokenized stocks are already seeing more traction. “Right now, we’re at what I call the infrastructure phase,” Sethi said. “Once that infrastructure is in place, which is what we’re betting on, then the user experience evolves very quickly.