As of the morning of September 16th, cryptocurrency exchange Kraken has the approval to become "America's first crypto bank." Kraken's Chief Legal officer Marco Santori broke the news in a Twitter thread, outlining what this means for the long-time Bitcoin startup.

Kraken is launching a branch of the organization tentatively called Kraken Financial in the state of Wyoming, where it has received approval to become the "world’s first Special Purpose Depository Institution." This means that the firm has received a bank charter "recognized under federal and state law."

As an SPDI, Kraken Financial intends to provide "comprehensive deposit-taking, custody, and fiduciary services for digital assets." This new entity will also allow Kraken clients - first in the U.S., then around the world - to bank between Bitcoin and national currencies. This should ease the friction that users often experience with interacting with Bitcoin.

What sets Kraken Financial apart from "normal banks," so to say, is the stipulation that it cannot lend on fractional reserves; that's to say that the organization must hold assets worth 100% of all client deposits at one time.

In disallowing fractional reserve banking, Kraken Financial is in-line with the ethos of many in the Bitcoin space. Santori also believes this rule will naturally lead to more responsible behavior:

"A crypto-focused bank would permit an efficient, transparent and responsible nexus between the traditional financial system and the crypto ecosystem." 

It's worth mentioning that there are other registered banks that focus on cryptocurrency. Silvergate is an American bank that services many of the largest companies in the cryptocurrency industry. Signature Bank has a similar focus.

What sets Kraken Financial apart is it is the first cryptocurrency firm to "receive a bank charter recognized under federal and state law." 

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