In a move that may pave the way toward mainstream acceptance for digital assets, an exchange received the first Wyoming banking license granted to a cryptocurrency firm.
What's going on: The Wyoming Banking Board will issue Kraken, a San Francisco-based crypto exchange, a special purpose depository institution charter.
- Headquartered in Cheyenne, Wyoming, Kraken Financial will enable Kraken clients in the U.S. to bank between digital assets and national currencies.
- Kraken clients will be able to hold digital assets and pay bills and get paid in cryptocurrencies within a regulated, US institution.
- The new institution will be regulated similarly to other US banks, but it is nuanced in its differences.
- The charter doesn't create a full-fledged bank but is part of a series of laws Wyoming passed to usher in cryptocurrency firms to the state.
- Kraken says it has 4 million users globally.
Launch plans: Kraken Financial plans a rollout of products and services over the next year.
- First up, it will give clients access to dollar deposits and custody of digital assets.
- These banking services will integrate into Kraken's existing services on its exchange, making it easier to fund crypto purchases and clarifying surrounding regulation of these new assets.
- With the license, Kraken will target individual and institutional clients.
Funding cryptocurrency from fiat money is an important hurdle the needs to be lowered if cryptocurrency is to become more widely popular. Kraken recently partnered with MVB Bank to enable banking customers to wire dollars in to fund their Kraken accounts.
“By becoming a bank we get direct access to federal payments infrastructure, and we can more seamlessly integrate banking and funding options for customers,” said David Kinitsky, a managing director at Kraken and the CEO of the newly formed Kraken Financial.