San Francisco-based cryptocurrency exchange Kraken has obtained a license that would enable it to launch a bank, named Kraken Financial, in Wyoming.
In a blog post today, the exchange revealed that the development comes after the Wyoming Banking Board approved its request for a Special Purpose Depository Institution (SPDI) charter. This approval makes Kraken the first SPDI bank in Wyoming.
According to the exchange, the newly approved financial institution will provide financial services to its clients, such as paying bills and receiving salaries in cryptocurrency, as well as incorporating digital assets into their investment and trading portfolios.
Not only will U.S.-based clients conduct financial transactions using cryptocurrencies, but Kraken Financial will also provide traditional financial services to clients, the company added.
Commenting on the development, David Kinitsky, CEO of Kraken Financial, said:
We’re thrilled to work in a state so aligned with our philosophy and values. Wyoming is a rare and shining example of how thoughtful regulation can drive innovation for FinTech companies.
SPDI Charter offers more opportunities
Kraken noted that it opted for an “SPDI charter” because it reduces the exchange’s reliance on third-party traditional financial institutions for its operations, which allows the firm to expand its products suite.
Furthermore, obtaining an SPDI charter under the Wyoming law grants Kraken the right to maintain 100% of its fiat deposits at all times, Kraken added.
At the moment, Kraken Financial service will be available only to U.S.-based clients, with plans being made to expand its operations globally.
With Kraken’s recent entrance into the banking industry, it is just a matter of time before more crypto-related companies make the same move, thus providing financial services for firms in the space.
The news is a welcome development for the crypto community, considering the issues that have lingered between traditional financial institutions and cryptocurrency exchanges for years.
Prior to this time, exchanges have had issues gaining access to traditional financial services, as most traditional banks do not seem comfortable with digital currencies. However, in recent times, banks have started opening their doors to cryptocurrency exchanges.