San Francisco-based crypto exchange Kraken has become the first cryptocurrency business to receive a charter to operate as a bank in the United States. When seen as part of a larger-scale shift in regulatory attitudes that may help to bring crypto into the mainstream, the repercussions could be even more significant.
Kraken Financial, the firm’s new bank, got the green light from Wyoming on Sept. 16 as a special-purpose depository institution (SPDI) — a bank that can both receive deposits and custody assets.
“For Wyoming, this is an economic development initiative,” founder and CEO of Avanti, Caitlin Long, told Cointelegraph in a joint interview with David Kinitsky, Managing Director of Kraken Financial.
Avanti is another crypto-first company seeking approval to operate a bank, although it has not yet received the legal go-ahead. “Wyoming is looking to diversify its economy to bring in jobs and capital — and revenue — from outside the state,” Long said. “The Kraken charter is the first of what Wyoming hopes are many,” she noted, mentioning that more than 1,000 companies have turned to the state to harness its fintech-friendly regulatory framework.
“Wyoming has also done a great job of forming this public/private coalition to get smart on industry issues,” Kinitsky added.
Two crypto companies serving different needs
Kraken went public with its charter approval on Sept. 16. Although the company is the first to receive official approval, Avanti surfaced in February 2020 to much fanfare within the industry, also seeking to receive a charter, albeit filling a different role.
The two entities compete in some ways, but not directly. “Everyone competes, right — and certainly we’re going to be competing on some level, there’s no doubt about that, but I would suggest that, at this point in time, our product sets and customer segments are more different than they are similar,” Kinitsky explained.
“Kraken is primarily consumer-focused, Avanti is exclusively…