For the First Time, a Cryptocurrency Exchange Is Becoming a US Bank

"By becoming a bank we get direct access to federal payments infrastructure."

Making Bank

The Wyoming Banking Board just voted to approve Kraken, a San Francisco-based cryptocurrency exchange, as a special purpose depository institution (SPDI). In other words, it's the first crypto exchange in the country poised to become a bank, as CoinDesk reports.

"By becoming a bank we get direct access to federal payments infrastructure, and we can more seamlessly integrate banking and funding options for customers," David Kinitsky, a managing director at Kraken and the CEO of the newly formed Kraken Financial, told CoinDesk.

Special Access

If its efforts pay off, Kraken Financial will no longer have to deal with a variety of different rules for regulating digital assets, depending on which state.

SPDI banks in Wyoming, as first established in November 2019, are still different than regular national banks. They never actually hold full legal ownership over any digital assets, but are legally allowed to hold them. Any assets following a bankruptcy must be returned to customers.

Crypto Debit

Kraken has big plans now that it has been approved. "We would expect to offer a host of new products as we get established," Kinitsky told CoinDesk. "Those will range from things like qualified custody for institutions, digital-asset debit cards and savings accounts all the way to new types of asset classes."

In July, the US Office of the Comptroller of the Currency issued a ruling allowing national banks to provide custody services to cryptocurrency startups.

Kraken Financial is now focused on building out its teams and is preparing to fully take over customer services for its operations.

READ MORE: Kraken Becomes First Crypto Exchange to Become a US Bank [CoinDesk]

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