Amidst the challenging regulatory environment, the popular SanFrancisco based cryptocurrency exchange is preparing to launch Kraken Bank ‘very soon.’ This bank will be based on the SPDI framework.
Already being an easy, safe, and secure exchange in the crypto world, Kraken seems to be taking measures to level up its adoption in the real-world.
Furthermore, in response to a comment on its tweet, the platform shared that its bank services will initially be available to its existing US-based customers before going international.
The First US-Based Digital Asset Company to Recieve a Bank Charter Approval
Back in September 2020, Kraken officially announced that it received a bank charter. With this news going public, Kraken became the first US-based digital asset company to receive a bank charter approval.
This bank charter application was approved by the State of Wyoming, giving rise to Kraken Bank then and there. The focus of this platform to be based on the Special Purpose Depository Institution (SPDI) framework was also decided back then with this approval.
Now despite the fortunate approval and early news of the launch of Kraken bank, the platform couldn’t proceed with the launch of its bank until recently.
It was primarily due to the regulators, as Kraken had to halt its stacking services in the United States because the Securities and Exchange Commission (SEC) security laws announced that crypto staking services will no longer be accessible by US citizens.
In an effort to settle this issue and prevent further complications, the exchange also paid $30 million.
Kraken Bank is Finally Happening!
Despite the challenges the exchange faced even after the successful approval of its bank charter, Kraken is all set to launch its bank while abiding by the law.
Since Kraken Bank will be based on the SPDI framework, the platforms aims to “prioritize asset custody and safekeeping, data protection, security standards, and stringent regulatory oversight” as stated on its website.
Now SPDI banks must keep entire reserves, which means that user funds would not be given out without their authorization. Therefore, all assets at this bank will be maintained on hand and available as cash or the least risky and most liquid cash equivalents.
Furthermore, Kraken Bank will also have sufficient capital reserves and capital surpluses to support the whole balance of all clients, even in situations like bank run.
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