As a special purpose depository institution (SPDI), Kraken Financial becomes the world's first cryptocurrency and digital asset bank approved in the United States.
In a release recently issued by Kraken, one of the most recognized cryptocurrency exchanges in the United States, the company confirmed that it obtained approval to become the first Crypto Bank in the country. The popular crypto trading and exchange platform will be the first regulated US bank to offer comprehensive services for receiving and sending deposits, custody and other services for cryptocurrencies, and digital assets.
With this innovation, Kraken Financial will be the first crypto bank to offer commercial and investment banking services to users of cryptocurrencies and other assets. Furthermore, it is estimated that this new entity will have the capacity to provide an adequate financial ecosystem for the interconnection and development of the crypto communities and the fiduciary system. Kraken Financial will offer financial and banking services to US citizens through an online and mobile system, which will facilitate user access to the services that this new entity will offer.
Although the name “Kraken Financial” is not yet final, the crypto community is excited about the creation of this new banking figure, which will function as a Special Purpose Depository Institution, also known as SPDI for its acronym in English. The entity will be registered in the state of Wyoming, United States, where Kraken's application was approved.
It may interest you: Tel-Aviv Stock Exchange (TASE) to launch blockchain-based platform for securities lending
The United States, a bridge between crypto development and traditional financial systems
The entity is the first banking figure recognized by United States federal statutes as a digital asset company that can operate legally in the country. With this approval, Kraken marks a second milestone in the history of the United States and the world, by becoming the second financial services company for cryptocurrencies to successfully receive approval to operate as a banking entity. This announcement also marks a milestone for the burgeoning crypto ecosystem and the reputation the United States is building as a center of innovation and development for cryptocurrencies and digital assets.
Kraken Financial will offer deposit, transfer and custody services for fiat money just as traditional banking entities do, but will also add these services for cryptocurrencies and other digital assets.
“From paying bills and receiving salaries in cryptocurrency to incorporating digital assets into investment and trading portfolios, Kraken Financial will enable Kraken customers in the US to seamlessly bank between digital assets and national currencies.”
On the other hand, the CEO of Kraken Financial, David Kinitsky, stated that working in a state like Wyoming, which is so aligned with the company's philosophy and values, is simply exceptional. Kinitsky assures that the existing regulations in the state of Wyoming will allow the momentum and innovation necessary for FinTech companies to connect the crypto economy with the traditional financial system.
Future services and expansion plans
As listed in Kraken's statement, the entity will offer digital asset custody services, demand or deposit accounts (DDA), bank transfer services and financing. In addition, Kraken will offer staking of digital assets, trust accounts and administration, mobile and online banking product packages and debit cards to use cryptocurrency funds for individual clients. Likewise, for corporate clients and organizations, Kraken Financial will offer services for account management, bank comfort letters, deposit verifications, and proof of funds certificates.
For its part, Kraken points out that although Kraken Financial's operations will begin locally in the state of Wyoming, United States, the SPDI figure allows the company to expand internationally and globally. The SPDI letter that Kraken received will help the organization very soon be able to offer its financial and banking services to companies, organizations and users around the world.
The company also aspires to become a qualified custodian for investors, and in this way offer services as a broker-dealer, in compliance with all applicable laws and regulations on the matter.
The SPDI figure for Kraken Financial
As Kraken's statement explains, SPDI is a figure that allows the company to operate as a traditional custody bank but with cryptocurrencies and digital assets. In addition, this figure offers an advantage over other forms of custody, and that is that Kraken Financial is obliged to maintain 100% of the reserves of its fiat deposits at all times.
Under this figure, Kraken Financial is obliged to deliver deposits and funds to each client who requests it, at the time they request it. This guarantees that regardless of the number of the company's outstanding loans, each client can use their resources whenever they want and the company will not be able to demand insured deposits, as occurs in FDIC figures.
Finally, under the figure of SPDI, the company will be regulated by the Wyoming Division of Banking, which is currently developing the first regulatory manual for banks and digital assets in the United States, based on Wyoming standards and the country's federal law.
Continue reading: BNP Paribas partners with Digital Asset to implement smart contracts on DAML
