Kraken announces acquisition of SPDI banking charter: "If traditional banks won't do it, we will!"

The U.S. cryptocurrency exchange Kraken announced yesterday that the state of Wyoming has approved the application for the "Special Purpose Depository Institution (SPDI)" charter of Kraken Financial, a new institution under Kraken. This will be the first compliant banking institution in the United States to offer customers cryptocurrency deposit, custody, and trust services.

Kraken Steps in Where Traditional Banks Don't

The news signifies that Kraken Financial will be the first digital asset company in U.S. history to obtain a Special Purpose Depository Institution (SPDI) banking charter, recognized by federal and state laws, and also the first U.S. bank able to offer clients cryptocurrency deposit, custody, and trust services.

Kraken Financial will adhere to the same regulatory standards as other U.S. banks and must maintain 100% fiat currency reserves at all times. Furthermore, as the SPDI banking charter will allow Kraken to establish a completely independent banking institution, this will effectively reduce the exchange's reliance on third-party financial institutions and even help other U.S. cryptocurrency exchanges and service providers roll out new products.

From paying bills with cryptocurrency, handling cryptocurrency payroll services, to integrating digital assets into investment and trading portfolios, Kraken Financial will enable Kraken's U.S. clients to seamlessly conduct banking operations between digital assets and fiat currencies. David Kinitsky, CEO of Kraken Financial:

"We are excited to be working in a region that aligns with our principles and values. Wyoming is a rare and clear example of how sound regulatory frameworks can effectively drive innovation for fintech companies."

SPDI Banks: Not Your Traditional Banks

SPDI banks are compliant banks approved in February this year in Wyoming that can provide cryptocurrency services. However, it is important to note that while SPDI banks adhere to the same regulatory standards as traditional commercial banks, they are not equivalent to traditional commercial banks. Traditional banks primarily focus on custody of fiat currency, securities, or commodities and provide clients with trading in securities and commodities markets, while SPDI banks focus on digital assets such as Bitcoin and Ether.

Initially, Kraken Financial will only offer account applications to U.S. citizens, but officials have stated they will expedite expanding their services globally.

On the other hand, AVANTI Banking and Trust, a blockchain bank led by Wyoming Blockchain Coalition Chair Caitlin Long, has also applied for an SPDI banking charter in accordance with Wyoming regulations and is expected to receive approval as early as October next year.