Kraken is launching a bank – Kraken Financial – that will be regulated under a new framework devised by the state of Wyoming
Recently, cryptocurrency exchange Kraken said it received a certificate of banking charter from the US state of Wyoming. This means Kranken will be the first crypto company to come to light, authorized to provide traditional financial services for both fiat and cryptocurrency to its users under Kraken Financial.
Kraken Financial will be regulated under a new framework devised by the state of Wyoming
Yesterday, the Wyoming Banking Council voted to approve Kraken’s application, allowing them to establish the world’s first Special Purpose Depository (SPDI), “Kraken Financial.” Thus, with this statement, Kraken is now the first SPDI bank in Wyoming. According to Wyoming Division of Banking adviser Chris Land, Kraken will also be the new bank, receiving its first banking charter since 2006.
Kraken Financial will allow customers in the United States to have seamless banking transactions between cryptocurrency and fiat, including the following categories:
- Pay bills with electronic money
- Receive a salary in electronic money
- Add cryptocurrency to their portfolios and transactions
This success of Kraken opens up a new perspective for crypto businesses. In the past, crypto companies have had a negative past with challenging and precarious banking relationships. Most traditional banks have refused to service such companies. Meanwhile, some foreign exchanges like Bitfinex have always had difficulty maintaining relationships with banking partners. However, when big banks are entering the market, mostly JPMorgan recently recognized Coinbase and Gemini exchanges as bank customers, it seems that the rivalry will be dispelled …
Dave Kinitsky, CEO of Kraken Financial, said:
“For Kraken, this represents a better banking infrastructure. We will be less dependent on third-party providers and bring more certainty from a legal perspective from there. allows us to launch new products for new customer segments. ”
Clients can also bank directly with Kraken Financial just like they would with their existing bank. For starters, the company will provide its customers with USD and cryptocurrency deposits – seamless integration into existing exchange services.
“There will be a phased approach. In the first phase, we expect to be the bank of choice by the customer, and in phase two or three, we will begin to provide services and new products.”
For example, Kinitsky said the company could launch a crypto debit card, a profit account product, or an IRA product. They will then observe that if it is okay, Kraken will provide securities, derivative, or commodity trading services.
For Kraken, they need to reach an agreement a few more points before they can officially launch their new bank. The company is in the process of finding correspondent banking partners and opening accounts with the Federal Reserve. It is also not clear whether every state will respect the status of the new banking charter from Kraken.
“We are on track, and we hope to get regulatory approval on Wednesday, and then we agree to those relationships and go into action. We look forward to a slow return. other states and have negotiated with some of them. ”
New York, which Kraken has overlooked in the past, can be a problematic state in asking for further steps … Let’s see if Kraken succeeds!
3/ I’ll be back w/ more analysis later. Next applicant in line for #Wyoming SPDI is @AvantiBT later this Fall (more are on the way). But today is @krakenfx‘s day. As a shareholder, I’m so happy for @jespow & Kraken team! Applications for this charter opened a yr ago–took longer
— Caitlin Long 🔑 (@CaitlinLong_) September 16, 2020
Following Kraken’s approval of the bank charter by the state of Wyoming, Founder and CEO of Avanti Bank and Trust, Caitlin Long, has expressed enthusiasm that Avanti Bank and Trust will be the next one in line as seen in the following tweets.
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