Kraken is one of the earliest cryptocurrency exchanges to come into existence and remain both functional and relevant. They applied to form the world’s first Special Purpose Depository Institution (SPDI) and it has been approved for the entity called “Kraken Financial”.
Kraken Financial will operate out of Cheyenne, Wyoming. It is also the world’s first digital asset company in the United States to obtain a bank charter, recognized under both federal and state laws.
David Kinitsky, the CEO of Kraken Financial, expressed his enthusiasm stating “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.”
According to the blog post, Kraken Financial will start operating locally but will soon become global.
It is no secret that any individual or business working within the digital assets space has faced difficulties when dealing with banks. Kraken Financial will act as a bridge between the digital asset world and traditional financial institutions. They are allowed to custody digital assets such as virtual currencies on behalf of their customers.
The post states: “Kraken Financial, as a bank, is required by Wyoming law to maintain 100% reserves of its deposits of fiat currency at all times.” It however does not comment on the fractional reserve laws in regard to the digital assets.
Jesse Powell, CEO of Kraken
You can’t make this stuff up. This timeline is beyond twisted. Certainly didn’t see a banking license in the cards when we set out on this mission 9 years ago. We have come full circle, crypto.
— Jesse Powell (@jespow) September 16, 2020