In a sign of the growing acceptance of digital assets within the world of traditional finance, Kraken has become the first crypto company to receive a banking license in US history.
The American exchange was granted the special purpose deposit institution (SPDI) charter in Wyoming on Wednesday, September 16.
Although not a fully-fledged national banking licence or an industrial loan company charter, the granting of the SPDI to the subsidiary Kraken Financial is nonetheless historic.
Recognising this, Governor Mark Gordon of Wyoming said: “I’m proud that Wyoming is leading the way in digital assets and [has] built the framework for this historic announcement to occur. This puts into practice what Wyoming saw as an opportunity to meet the challenges of a digital economy and allow businesses a way to hold digital assets safely.”
Kraken Financial CEO David Kinitsky, who previously ran Grayscale Investments (the largest cryptoasset manager in the world) said: “By becoming a bank we get direct access to federal payments infrastructure, and we can more seamlessly integrate banking and funding options for customers.”
Wyoming, the land-locked western state with less than 600,000 residents, may come as a surprising location for the latest step in the burgeoning cryptocurrency industry.
The cause for its pioneering position can largely be attributed to a more accommodating regime of regulation. Kraken shut down its operation in New York five years ago after the state introduced a set of rules for cryptoasset firms called a “Bitlicense”.
Describing the new rules as “abominable”, the company relocated to San Francisco and searched for more crypto friendly states. Looking ahead, the company said that its operations “will start locally, but will soon operate globally”.