| Cryptocurrency exchange Kraken has received approval from the Wyoming Banking Board to operate as a Wyoming Special Purpose Depository Institution, giving it permission to take deposits, operate payments systems and custody crypto for individuals, businesses and regulated entities.
Like other cryptocurrency exchanges, Kraken has relied on third parties to conduct wire transfers or other services that integrate its crypto offerings into the larger financial system. With the formation of Kraken Financial, as this new “crypto bank” is called, it can now provide these banking functions to customers directly. It may even eventually apply for an account and membership at the Federal Reserve.
“A crypto-focused bank would permit an efficient, transparent and responsible nexus between the traditional financial system and the crypto ecosystem,” Marco Santori, Kraken’s chief legal officer, explained in a tweet thread. “Kraken hopes to offer digital asset custody, checking and savings accounts, wire transfers, trust accounts, online and mobile banking UIs, debit cards, account management services … and deposit verifications.”
Santori credited the State of Wyoming’s forward-thinking legislation with creating the opportunity for Kraken to take this step. You can start exploring that Rabbit Hole with our coverage from 2019.
But Kraken’s move also speaks to an issue that has long plagued the Bitcoin industry: restricted access to mainstream banking services. The journey toward this regulatory approval may have only been necessary because of the barriers that exist between financial services and crypto-focused businesses like Kraken. For more on that Rabbit Hole, explore our story “Breaking Up With The Banks: Stories From Bitcoin’s Debanked Community.”
We reached dozens of Bitcoiners whose banks had restricted or closed their accounts in response to cryptocurrency activity. It puts this latest news from Kraken into some powerful context: If you can’t beat ‘em, join ‘em (then destroy ‘em.) | 
