Kraken Gets License for Wyoming’s First Cryptocurrency Bank

Cryptocurrency exchange Kraken has secured approval from a state regulator in the US to launch a crypto bank under an SPDI charter. The San Francisco-headquartered firm has received formal notice from the Wyoming Division of Banking that the application of its subsidiary was accepted.

Kraken applied for a bank charter under Wyoming’s special-purpose depository institution law. It will tentatively do business under the name 'Kraken Financial'.

An SPDI bank charter permits Kraken to operate an independent bank that will reduce reliance on third-party financial institutions and allows the exchange to provide deposit-taking, custody and fiduciary services for digital assets.

“From paying bills and receiving salaries in cryptocurrency to incorporating digital assets into investment and trading portfolios, Kraken Financial will enable Kraken clients in the U.S. to bank seamlessly between digital assets and national currencies,” a post on Krakens blog states.

In its first phase of operation, Kraken Financial will only offer accounts to U.S. residents.

Krakens expects to serve as a compliant bridge to the U.S. dollar Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term system and a custodian of digital assets. However, it will be required to comply with all federal and state laws, including 'know your customer', anti-money laundering and related regulations. It will also comply with Wyoming’s SPDI and digital asset laws, which include requirements that fiat deposits be 100% reserved and meet the consumer protection standards.

Avanti Also Competes for a Similar License

Wyoming has been developing its crypto initiative since 2018 when it announced plans to draft special-purpose banking legislation to cater to crypto companies. Now, the state already has a comprehensive framework and supervisory process in place for cryptobanking licenses, which does not exist elsewhere.

Earlier this year, the state regulator began taking applications to charter a new type of crypto-friendly bank. Shortly after, Kraken alongside a handful of firms have indicated their intent to apply.

Avanti Financial Group, founded by Wall Street veteran and Wyoming Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term Coalition founder, Caitlin Long, was also floated as one of the key players seriously pursuing charters from the state banking division.

Headquartered in Cheyenne, Avanti was established through a partnership between Long and Blockstream, a software company that has ties to some of the big names in Silicon Valley. The company is expected to get off the ground sometime in early 2021.

Kraken, a cryptocurrency exchange operating from the United States, has recently expanded its operations in Europe and Asia. Last week, it also re-launched its trading services for Japanese residents, nearly two years after it exited the lucrative market.

Furthermore, Kraken’s UK subsidiary, Crypto Facilities, has received authorisation from the UK Financial Conduct Authority to operate a multilateral trading facility (MTF).