The U.S. banking industry is pushing back against the Federal Reserve’s decision to grant crypto exchange Kraken direct access to its core payments infrastructure, warning the move could introduce new risks to the financial system.

Kraken’s Wyoming-chartered banking arm, Kraken Financial, recently secured a limited-purpose Federal Reserve “master account,” making it the first crypto-native firm to connect directly to the central bank’s payment rails.

The account allows the firm to process transactions through systems such as Fedwire without relying on intermediary banks, enabling faster fiat transfers tied to digital asset markets.

U.S. banking lobby warns of risks after Kraken gets Fed payment account

While the approval represents a milestone for the crypto industry, major banking groups have voiced strong concerns about the decision. The Independent Community Bankers of America (ICBA) said it has “deep concerns” about granting a master account to Kraken Financial, arguing that crypto-focused institutions operate under different regulatory frameworks than traditional banks.

Banking lobby groups also questioned the approval process. The Bank Policy Institute said the Kansas City Federal Reserve granted what appears to be a “limited purpose” or “skinny” master account before the Federal Reserve Board finalized the policy framework governing such access.

According to the group, the move lacked transparency and could undermine consistency across the Fed system.

Critics also point to Kraken Financial’s status as a Wyoming Special Purpose Depository Institution (SPDI), which is not federally insured like traditional banks. Banking advocates argue that allowing uninsured institutions to access the Fed’s settlement infrastructure could pose financial stability and compliance risks.

The debate highlights growing tensions between traditional financial institutions and the digital asset industry.

If upheld, Kraken’s approval could serve as a precedent for other crypto companies seeking similar integration with the U.S. banking system, potentially reshaping how digital assets interact with traditional financial infrastructure.

The SKY token rallied roughly 10% over the past 24 hours as investors responded to the protocol’s ongoing token buyback program and governance updates designed to reshape its tokenomics.

SKY climbs double digits as protocol buybacks fuel rally

According to on-chain data, the token’s latest move comes amid renewed interest in the project’s supply reduction strategy. The Sky protocol has been actively repurchasing its native token through a treasury-backed buyback mechanism, which removes tokens from circulation and can reduce selling pressure.

Data from the protocol’s public buyback dashboard shows that more than 1.8 billion SKY tokens have already been repurchased through the program. The buybacks are funded using USDS from the project’s treasury and are executed directly on the market.

The strategy mirrors traditional corporate share buybacks, a model increasingly adopted by some decentralized finance protocols to return value to token holders and support price stability.

Momentum also appears to have been boosted by recent governance developments within the Sky ecosystem. A newly approved executive vote introduced several operational updates, including adjustments to staking rewards and treasury management functions.

One of the key changes involves the normalization of SKY staking rewards, a move that effectively slows the rate at which new tokens are issued to participants.

By reducing emissions, the protocol aims to limit inflationary pressure on the token while maintaining incentives for network participants.

The governance vote also included operational updates related to agent onboarding and settlement cycles within the protocol’s broader infrastructure.

Taken together, the buyback activity and emission adjustments have strengthened the narrative around SKY’s evolving tokenomics, which increasingly emphasize supply management and revenue-backed incentives.

The rally highlights growing market interest in DeFi projects experimenting with token value accrual models that resemble equity-style financial mechanisms.

If the buyback pace continues and governance changes further tighten supply, analysts say SKY could remain a closely watched token in the decentralized finance sector.

Crypto asset manager Bitwise has now donated a total of $383,000 to support developers who maintain and secure the Bitcoin network since 2024, with its latest $233,000 contribution announced on Wednesday. 

Its second payout, funded by 10% of gross profits from its Bitwise Bitcoin ETF (BITB), adds to the $150,000 that it donated in February 2025 after BITB’s first full year.

“Bitwise is proud to donate $233,000 to support the unsung heroes maintaining and securing the Bitcoin network,” Bitwise said in a post to X on Wednesday. 

Around the time of BITB’s launch in January 2024, Bitwise pledged to direct 10% of gross profits to Bitcoin developers, who play a key role in securing what has become a $1.4 trillion network.

“As $BITB continues to grow, so too does our contribution. Bitcoin is changing the world, and Bitwise will always strive to do our part to be a good steward of this incredible ecosystem.”

Bitwise said three Bitcoin-friendly non-profit organizations will allocate the funds: Bitcoin Brink, OpenSats and the Human Rights Foundation, through its Bitcoin Development Fund.

The $233,000 donation suggests Bitwise generated $2.33 million in gross profits from BITB in its second year.