Kraken Bank is the first cryptocurrency exchange to receive a U.S. state banking charter. The State of Wyoming has approved Kraken Bank application to form the world’s first Special Purpose Depository Institution (SPDI). It plans to launch in 2022.
Kraken bank account will provide regulated deposit-taking, custody and fiduciary services for cryptocurrencies and related crypto assets. The bank account will operate on online and mobile-first banking model.
Special Purpose Depository Institutions (SPDIs) are banks that receive deposits and conduct other incidental activities, including fiduciary asset management, custody and related activities. SPDIs may resemble custody banks in that these institutions will likely focus on fiduciary activities, safekeeping, asset management and servicing.
What Services Will Kraken Offer?
Kraken services will provide a bridge between digital assets and US dollars. The bank account will offer the following crypto banking services:
- Paying bills in cryptos
- Receiving salaries in cryptocurrency
- Incorporating digital assets into investment and trading portfolios
- Digital asset custody
- Demand/deposit accounts (DDAs)
- Wire transfer and funding services.
In the next few years, Kraken intends to expand its services to include digital asset staking, trust account and administration, a complete online and mobile banking suite of products, and a debit card for cryptocurrencies. Corporate clients will also enjoy the following services: account management services, bank comfort letters, deposit verification, and proof of funds attestations.
Forward-looking statements, including product offerings, regulatory plans and business plans subject to change without notice.
Where Will Kraken Operate?
Having a US bank charter, which is recognized by federal and state laws, means that Kraken will be able to operate throughout the United States. However, it plans to extend its operations to other parts of the world. In the first phase, Kraken will only offer accounts to U.S. residents.
Will Kraken be Safe?
Kraken online bank is required by Wyoming law to maintain 100% reserves of its deposits of fiat currency at all times to protect customers’ deposits. If every client were to demand withdrawals of their fiat at the same moment, Kraken would be able to fund the withdrawals. Despite being a non-traditional bank, Kraken will be regulated in the same manner as other US banks by the Wyoming Division of Banking.
Final Thoughts on Kraken Crypto Bank Account
As cryptocurrencies such as Bitcoin are slowly going mainstream, Kraken’s licence to operate a virtual bank account to handle digital assets is a step in the right direction. We are looking forward to review its services once the bank is fully operational.