The First Crypto Bank: What Kraken Financial Will Do and How
In this episode of Unconfirmed podcast with Laura Shin, David Kinitsky, CEO of Kraken Financial, talks about Kraken's news that it is launching a bank, after receiving approval to form a special purpose depository institution (SPDI) from the state of Wyoming.
- Why Kraken decided to become a crypto bank, and what it will be able to do with this status.
- How this status will affect the consumer experience for crypto users.
- What kinds of crypto assets it will be able to deal with.
- How quickly it will list coins, such as those DeFi coins that quickly balloon to billion-dollar market caps.
- What its designation, special purpose depository institution (SPDI) means, and why that has special meaning for crypto users.
- What "bailment" means, and why that's significant for crypto users interested in using a crypto bank, and how that would affect users in the event any coins were stolen or lost.
- How Kraken Financial's status as a crypto bank will affect the longstanding problem in the industry of obtaining and maintaining bank relationships.
- How this overlaps and works in conjunction with other recent regulations that have affected the crypto industry, such as the OCC saying banks can custody crypto assets.
- How its SPDI status will affect how Kraken Financial is regulated in New York State where the BitLicense is in effect.
- Why Kraken, which has a reputation for pushing back on what it deemed to be overreach by regulators, decided to pursue the SPDI.
- How Kraken Financial will make money, despite keeping 100% reserves.
- David's extensive background in cryptocurrency.
- The timeline going forward for Kraken Financial.
The interview was published on September 18, 2020.