Crypto-exchanges become banks – Traditional banking institutions have, with all their might and at all times, criticized cryptocurrencies. However, this was not enough, however, since for the first time in the United States, a crypto exchange platform becomes its own bank: Kraken.
Kraken approved as deposit bank
A publication on the blog of the crypto-exchange Kraken tells us that its branch called Kraken Financial has just been awarded the title of Special Purpose Depository Institution (SPDI) by the US state of Wyoming .
“Wyoming is a rare and shining example of how thoughtful regulation can spur innovation for FinTech companies. » David Kinitsky, CEO of Kraken Financial
This title, which could be translated as a repository with a specific vocation (here, digital assets), will allow Kraken teams to establish a “bridge of trust” between the economy of the future of the cryptosphere and the current economic system.
The platform thus becomes the first regulated American bank to provide complete deposit and custody services for digital assets and traditional fiat currencies (dollars, euros, etc.).
Kraken Financial, a future international bank?
Based in Cheyenne, Wyoming, Kraken Financial will begin working locally before expanding throughout the United States. Its final objective is announced cash : “Kraken Financial will soon operate on a global level” .
As an SPDI, Kraken Financial will even have a big advantage for its clients, compared to traditional banks. It will not practice a fractional reserve of its fiat currencies.
Indeed, this banking charter requires to hold 100% of deposits in fiat currencies . Because of their fractional reserve, traditional banks do not guarantee the deposits of their customers only to the tune of $ 250 000 on average in the United States. In Europe, this insurance mechanism is 100,000 euros: beyond that, in the event of bank failure , customers have no guarantee of reviewing their money.
In its first months of operation, Kraken Financial plans to enable its clients to:
Deposit USD into a deposit account ;
Keep digital assets with the same level of collateral as any bank;
Make bank transfers .
The staking of cryptocurrencies will be supported, not to mention the provision of a bank card to spend their crypto funds and other banking services for the customers of the crypto-bank.
Why wait for an approval from traditional banks that will never come? Kraken has understood this and is already laying the foundation stone for the banks of tomorrow, which will bring together state currencies and cryptocurrencies at the same level.