Kraken officially becomes the first cryptocurrency bank in the US
By Bob Garcia
Cryptocurrency is no longer the black sheep of the currency ecosystem
The cryptocurrency industry offers a lot of advantages for business entrepreneurs and for investors as it gradually takes over the mainstream market. There are cryptocurrency companies working their way into more traditional banking institutions in an attempt to make the line between both industries a lot blurrier and get into the mainstream financial market. Wyoming just granted a license for the creation of a cryptocurrency bank to the popular crypto exchange Kraken, marking a huge step forward for crypto banking options. The name for this first-in-the-country crypto bank is Kraken Financial, although it is not a fixed name yet.
The license given to Kraken is specifically a “Special Purpose Depository Institution,” which grants the exchange permission to provide custody services for digital assets, operate payment systems and even allow customers to smoothly switch between fiat and digital tokens. This newly created financial institution can provide service to any American, except for those located in New York. People and companies have the option to even pay salaries using cryptocurrency, hold digital assets in the bank and pay bills using these accounts.
According to David Kinitsky, Kraken Financial’s CEO, the bank “expects to launch this either later this year, but most likely at the beginning of [the first quarter of] 2021.” The goal of the crypto exchange is to introduce new services for customers, including crypto-based debit cards and staking services in the next few years. This license has its limitations, though, as Kraken Financial will be a “custody bank,” so there is a restriction on issuing loans or using customers’ deposits. According to the state’s law, Kraken must always keep all of its customer’s assets in a reachable reserve.