Wyoming GOP Senator Cynthia Lummis, a vocal advocate for Bitcoin (CRYPTO: BTC), praised Kraken getting access to the Fedwire payment system as a breakthrough for integrating digital assets with traditional finance.

Lummis said in a CNBC interview on Wednesday that Kraken qualified under Wyoming's Special Purpose Depository Institution (SPDI) framework, a regulatory structure designed specifically for crypto-focused financial institutions.

According to Lummis, the approval creates a new pathway for direct integration between fiat dollars and digital assets, allowing Americans easier access to crypto-related financial services.

She also criticized the Biden administration, saying earlier policies blocked similar crypto firms from gaining access to the Federal Reserve's payment system.

Lummis says the move could accelerate partnerships and mergers between banks and crypto companies, helping build what she described as a 21st-century financial services industry.

Banking Groups Raise Concerns

Not everyone shares the same enthusiasm.

Journalist Eleanor Terrett reported that several banking organizations are pushing back against the decision to grant Kraken a Federal Reserve master account.

The Bank Policy Institute objected that the Federal Reserve Bank of Kansas City may have violated policy by effectively moving ahead of the Federal Reserve Board's public comment process on payment system changes.

The Independent Community Bankers of America warned that community banks are "very concerned", arguing that granting non-bank crypto firms' direct access to Federal Reserve infrastructure could create regulatory and financial stability risks.

Critics worry that allowing crypto institutions direct access to the Fed's payment rails could disrupt the traditional banking system and introduce new oversight challenges.

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