The Wyoming Banking Board granted cryptocurrency exchange Kraken’s application for a special purpose depository institution [SPDI] charter on Wednesday. With this approval, the San Francisco-based platform will now be able to create a crypto bank in the state.
According to Kraken’s Chief Legal Officer, Marco Santori, the bank was tentatively called ‘Kraken Financial’. It is quite an important development in the cryptocurrency ecosystem since with this approval, Kraken not only becomes the first newly chartered [de novo] bank in Wyoming since 2006 but also the first exchange to roll out a bank under a new regulatory framework in Wyoming. This move will essentially expand its product suite.
To solidify its position as a bridge between crypto and traditional finance, Kraken Financials will provide crypto-focused services such as digital asset custody, demand/deposit accounts [DDAs], wire transfer, and funding services in its first year of operations
With a permanent physical presence in Cheyenne, Wyoming, Kraken Financial, is the first digital asset company in the country’s history to receive a bank charter recognized under federal and state law. Additionally, it will be the first regulated U.S. bank to provide comprehensive deposit-taking, custody as well as fiduciary services for digital assets.
The new bank will enable Kraken’s clients in the U.S. to bank easily between digital assets and national currencies by enabling its customers to pay bills and receive salaries in crypto, incorporate digital assets into investment and trading portfolios. However, Kraken Financials will not be allowed to issue loans using customer deposits and will be regulated largely similar to other U.S. banks.
Kraken’s official blog post revealed,
“During its first year of operations, the SPDI plans to give clients the ability to deposit USD and custody digital assets at a regulated state-chartered bank. These banking services will be seamlessly integrated into the existing exchange services, providing clients better funding infrastructure, a better experience and enhanced regulatory clarity”