The Wyoming State Banking Board has voted to grant Kraken a special purpose depository institution (SPDI) license that would control Kraken Financial. This makes Kraken the first cryptocurrency exchange to become a US-regulated bank.
Recently resuming its services in Japan, Kraken is now expanding its services as the first cryptocurrency bank in the US, to be headquartered in Cheyenne, Wyoming. To add on, Kraken will also be the first newly chartered (de novo) bank in the state since 2006.
Features of the Wyoming Bank Charter
The newly formed Kraken Financial will be able to hold digital assets in custody, approve payment transactions and operate payment systems. Also, customers can easily switch between fiat money and crypto.
Furthermore, Kraken will provide digital asset custody services to investors in 49 US states. The license will allow Kraken to provide its services to clients in more jurisdictions and won’t have to deal with the state-by-state compliance part.
Wyoming Governor Mark Gordon also expressed the advantages of the banking charter:
Today Wyoming became the first state to approve a banking charter for digital assets. This will allow those using digital assets, like cryptocurrency, to access reliable financial services, protect consumers, and allow businesses a way to safely hold digital assets.
— Governor Mark Gordon (@GovernorGordon) September 16, 2020
The much-anticipated Kraken news comes less than two months after the Office of the Comptroller of the Currency (OCC) in the US published a letter stating that US Federal banks are now allowed to offer crypto custody services.
Kraken Financial CEO David Kinitsky also explained the importance of acquiring this SPDI,
Kraken’s mission has always been to promote the adoption of digital assets to enable more individual financial freedom.
Kraken’s Aspirations as a Regulated US Bank
Kraken aims to expand and enhance digital services across the globe. Having become a US bank the crypto exchange plans to issue crypto debit cards and also offer staking services. All Cryptocurrency funds could also be held with the bank, and Kraken will maintain its customers’ crypto investments, just like any traditional financial institution.
Kraken’s Chief Legal Officer Marco Santori gladly introduced America’s first crypto bank to the world. According to him:
13. A crypto-focused bank would permit an efficient, transparent and responsible nexus between the traditional financial system and the crypto ecosystem.
At least that’s how @krakenfx saw it.
— Marco Santori (@msantoriESQ) September 16, 2020
Moreover, the digital asset exchange aims to offer services in which US residents pay their bills and receive salaries in cryptocurrencies. However, those who reside in New York will be exempted from these services.
Prior to the above, Kraken closed its operations in New York in 2015 when the state issued a set of regulations for digital asset companies to follow. Upon implementing BitLicense, Kraken was required to “disclose all the information” about Kraken’s entire global client base to the state’s financial authorities. As they fail to do so, it was considered as a privacy violation.
Led by CEO Kinitsky, Kraken has about 4 million clients globally. Kinitsky is a former attorney and has 15 years of experience in financial services. On top of that, SPDI banks in Wyoming were first established in November 2019.
