Wyoming Regulators Approve State’s First Crypto Bank | 307 Politics

Wyoming’s banking division this week approved the state’s first charter for a business to begin banking with cryptocurrency, marking the country’s first approval of a new type of banking charter in more than 40 years.

By a unanimous vote on Wednesday morning, the Wyoming Banking Board granted cryptocurrency firm Kraken the state’s very first charter as a special purpose depository institution, allowing the company to begin offering services. to users of cryptocurrencies – digital and encrypted forms of currency – on a daily basis. life.

“We are delighted to be working in a state so aligned with our philosophy and our values,” said David Kinitsky, CEO of Kraken Financial, in a statement. “Wyoming is a rare and shining example of how thoughtful regulation can spur innovation for FinTech companies. “

The institution – legalized by a 2019 law led by Representative Tyler Lindholm, R-Sundance – will be the country’s first and will soon allow consumer and business services to anyone looking to bank using crypto. – currency without the use of third parties. party services.

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Although its services are limited in an attempt to reduce competition with community banks – loans will not be allowed, for example – the charter will allow Kraken to provide clients with the means to close real estate transactions or enter into commitments. traditionally in wire transfers and other services. in the realm of traditional banking, and this could potentially make cryptocurrency a more accessible medium for consumers.

But it also makes Wyoming a leader in domestic cryptocurrency markets and lays the foundation for the state to become a key player in international markets. According to a Kraken blog post on Wednesday, the company hopes to roll out its banking services globally, although it will initially limit the cryptobank to U.S. consumers exclusively.

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“I am delighted that this day has finally arrived,” Governor Mark Gordon said in a statement. “I am proud that Wyoming is leading the way in digital assets and has built the framework for this historic announcement. This puts into practice what Wyoming saw as an opportunity to address the challenges of a digital economy and enable businesses to hold digital assets securely.

Despite being the state’s first Special Purpose Depository Institution, or SPDI, Kraken won’t be the last. WyoFinancial, a company backed by former Austin, Texas resident Jeremy Drzal, is looking to make its own breakthrough in the state, while Avanti Financial – a company run by former crypto advocate Wall Streeter and Cheyenne Caitlin Long – is in the process of finalizing her application and is expected to hold her own hearing in the near future.

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While this is a significant milestone for the company, Kraken has yet to gain Federal Reserve approval to officially begin operations, which Kinitsky said shouldn’t be a challenge in an interview with the Star-Tribune Wednesday morning.

While there were some initial concerns about the viability of Kraken’s claim to the state after allegations that company management forged addresses in business files filed in California last December, state regulators told the Star-Tribune they had access to the company’s finances and saw no reason to deny the company’s claim.

Kinitsky said on Wednesday that he did not believe the lawsuit would have an effect on his application to the Federal Reserve.

“We have been forthright with all the relevant documents and the regulators involved, and everyone has been satisfied,” Kinitsky said.

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In the meantime, Kraken is moving fast. Kinitsky said he plans to start phase one operations shortly, with a target date of March 1 to start offering some limited services.

While a physical location in Cheyenne is yet to be finalized, Kinitsky – who recently completed their move to Cheyenne – said the company would likely establish one in the near future and start hiring between 10 and 25 employees in the region. region.

The services will likely resemble the company’s current offerings in the first year of operation, Kinitsky said, with plans to expand the offerings on the retail and institutional side in years two and three, including cryptocurrency debit cards, wealth management services and more.

The company also sees an opportunity for future partnerships with the traditional banking sector to serve as a “bridge” between the two sectors and potentially enable community banks to offer digital asset services to their customers.

“This could be a huge opportunity for us,” Kinitsky said.

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