In what was a major milestone for the crypto industry, last week, crypto exchange Kraken received its banking license and announced its plans to launch its own banking service in Wyoming in a bid to expand its product suite.
Now, in the latest episode of the Unchained podcast hosted by Laura Shin, Kraken Financial CEO David Kinitsky has further revealed the new services that the firm plans on offering once it launches.
The CEO stated that Kraken Financial will have “direct access” to the federal payment system, which will allow them to “seamlessly integrate funding and withdrawal mechanisms and payment mechanisms” in their products.
He added that this would enhance the quality of “customer experience,” and also cut costs for making transactions. As some examples of the new products the firm will be launching, Kinitsky said it would include:
“Things like debit cards backed by digital assets, things like staking, things like IRA accounts or other tax-advantaged accounts, things like wealth management and investment product services, the list goes on.”
Furthermore, these services won’t just be limited to retail customers as the company also has plans to serve institutional clients, with services like qualified custody on top of others.
No loans from Kraken Financial
The CEO also highlighted that unlike other banks, Kraken Financial will be required to keep 100% reserves, meaning that it won’t be able to loan out the money of its depositors as a means to generate income.
However, that doesn’t mean that the firm won’t be able to survive as a banking institution. Kinitsky explained:
“Even though you have 100% reserves, you still are able to earn some yield on US dollar-denominated assets via treasuries or other types of very highly rated securities that all banks invest in that are separate from the type of lending and portfolios that they conduct otherwise […]And then percentage fees on crypto assets that are safe kept or custodied with us. All of the new products that I mentioned earlier have revenue streams attached to them.”