Kraken becomes a US Bank: WILL IT BRING an awaited MASS ADOPTION to the crypto industry?
INTRODUCTION
Within the past several weeks, I've been extremely busy managing our PH community and I didn't really have much time to publish my own content. However, today I would like to share some news with all of you, which may be a turning point when it comes to achieving mass adoption within the crypto industry. News, which seem to be huge and could potentially bring enormous (and positive) consequences in the future. At the same time, it's one of those news, which not many people seem to talk about:
Kraken is the first cryptocurrency firm in the U.S. to become a bank.
Please allow me to quote Coindesk:
On Wednesday, the Wyoming Banking Board voted to approve the San Francisco-based crypto exchange’s application for a special purpose depository institution (SPDI) charter. Kraken is now the first SPDI bank in Wyoming. According to the Wyoming Division of Banking’s general counsel, Chris Land, Kraken will also be the first newly chartered (de novo) bank in the state since 2006.
“By becoming a bank we get direct access to federal payments infrastructure, and we can more seamlessly integrate banking and funding options for customers,” said David Kinitsky, a managing director at Kraken and the CEO of the newly formed Kraken Financial. (Kinitsky has run Grayscale Investments, was the first digital assets hire at Fidelity and was most recently head of business development at payments startup Circle.)
Mark Moss further explains:
There are a number of professional youtube channels out there which focus on financial education, and one of my favourites is managed by Mark Moss (since I discovered it - I didn't miss one video and I absolutely recommend checking this guy out)
In his recently published video, (link below) Mark shares his thoughts on that particular topic and he also seems to share his excitement about the future of Bitcoin as a store of value. I would like to recommend to each one of you, to invest several minutes of your time to go through that particular video:
The First Massive Change To Banking in 100 Years | What You Must Do Now
HOW IMPORTANT IS THIS ANNOUNCEMENT?
I've watched several youtube channels run by reputable "influencers" and they all seem to agree that the consequences behind this announcement will be enormous.
Please correct me if I'm wrong: Based on my understanding, it will be possible to have your bank account and crypto wallets in one place. So I could have my funds in FIAT currency and also BTC (or other crypto) on one account - in the same bank. Did I understand it well?
I spoke about it with my partner and she asked me a good question: why is it such a big deal? What would that change?
I replied asking her: let's assume that you would like to invest some of your savings into bitcoin. How would you do that, without technical skills and knowledge? Would you spend hours learning about ways of buying bitcoin, creating a wallet and storying it somewhere? Or would you end up frustrated and give up halfway?
What if one day we could have our account in the bank, and on this account we could store our FIAT as well as BTC (and other crypto)? What if changing your FIAT to crypto (and other way around) would be as simple as transferring money from one sub-account to another (within the same bank)?
Mass adoption requires SIMPLICITY and convenience.
SHARE YOUR VIEW
More than anything, I would like to learn from you (dear readers) what you think of this announcement. Did I interpret it well?
Would you consider this news to be a positive one? Or negative?
Is it more of an opportunity for the crypto industry, or a threat of falling under more regulations?
Share your thoughts with me. I read and reply to all valuable comments.
RESTEEM if you can
I would naturally appreciate every RESTEEM, as it would allow me to reach out to a wider audience.
Yours, Piotr
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"Based on my understanding, it will be possible to have your bank account and crypto wallets in one place."
According to Kraken, they will offer these services in the first year of operations:
Another exciting part to all of this is the insurance side. The US FDIC insures depositor’s money up to $250,000. However, BTC is a little different because it significantly fluctuates in value, unlike the dollar. So a more sustainable way to insure BTC custody, is to buy BTC, and hold BTC on their books, essentially matching bitcoin for bitcoin.
Lloyd's of London announced a new product this year:
“It is a new type of liability insurance policy with a dynamic limit that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed asset even if this fluctuates over the policy period.”
Now they do not say whether they hold BTC on their balance sheet, but global insurers are in the business of protecting from risk and exposure, and to have an insurance policy with a dynamic limit, needs to have an asset that dynamically mirrors bitcoin, hence bitcoin. And that is a lot of buying pressure on BTC. The same could be said for insuring any other digital asset. Stablecoins could also play a role.
Nothing exists in a vacuum, and I know that I'm leaving out a great deal of possibilities. But there is a notable feedback loop effect to insuring crypto. For every BTC held in custody, there will be a BTC bought and held on institution's balance sheets. And with any asset, the more demand, the higher the price, everything else being equal.
Fantastic post @crypto.piotr!
Appreciate your AMAZING comment @fijimermaid
seriously love it!
This is indeed big news. While the effects might take a while to manifest, this could be a game changer in terms of mass adoption.
Dear @crypto.piotr
I have mixed feeling about this news
On one front I am happy that one could keep your fiat an crypto in one place.
However I have a concern. If you track the history of money from a point it was made of real precious metals like gold and silver to a point it is mere a promise note where it is only a promise to pay and keeps losing value over time.
So would the broken monitory system incorporating crypto be a plus or those who are causing the fiat system to fail find ways to exploit crypto to serve their own means ?
It is anyone's guess
Being the optimist I am hope some good comes out of all this.
hi buddy
did you delete your discord account? I somehow cannot find you any more :(
I have not deleted my account let me send you a message in a while.
discord communication can be a challenge at times
i think tis is going to change the mind of people who don't understand the crypto and this is huge news and bring more new users in crypto and the first step of crypto mass adoption. thanks for sharing this ....
There are endless possibilities in the world of cryptos, it is very good news and it would be great to forget about the stress and be able to appreciate and enjoy that combination of cryptography and flat in a bank account, we must not forget that not everyone has access to banks, many people do not even know what that is, although with the magnificent salary that we educators earn, I do not think we have to go to the bank. Thank you for this wonderful news, and I also remind you that my name is forgotten in your long lists, my friend Piotr.
Appreciate your comment @sandracarrascal
This is a good development and we should be happy and excited about it. Nevertheless, I honestly think that it will only be fine if the banks do not have the private keys to the account. Because if they do, the whole idea of decentralization and freedom will be defeated.
Ps: Post resteemed
Appreciate your comment and resteem buddy :)
Greetings dear friend @crypto.piotr, without a doubt it is something innovative and something strange that a bank allows transactions with cryptos as you well comment in the publication, it has its advantages and disadvantages. One of the advantages would be the ease of handling cryptos by beginners and the disadvantage would be that the big capitalists might want to centralize the handling of cryptography.
Anyway we can not be closed to the possibility of this type of banks for everything in this life is necessary to make trials, to know the viability of things.
Thank you very much, for sharing the information, it is of great importance for the community! 👍
Appreciate your AWESOME comment @amestyj
Definitely positive news. While banking systems will still try to centralize the technology, I believe it's already too big for them to stop once they have adopted any decentralize part. The the ones that most concern me are the corporations that reject decentralized coins and try to create limited access blockchains as a service.
News about Kraken has been raging over the past day. It is indeed exciting having a crypto 🏦. What I'm more excited about is the state of Wyoming!
It seems that this state has tied its economic future to crypto. And that's why most of us are here, for real substantial change on a global level. Not just representation, but an overhaul of the system.
Wyoming is one of the lesser-known states in the nation. Still, it is part of the heartland. You do not need to drive through it traveling between New York and California. So the only people that visit the state or those that need to be there for business which are few or those wanting to experience the mountains. Then there are the reclusive types which probably describes every one in the state.
So when that kid that hasn't said anything all year stands up in the back of the class and upholds crypto... and that kid has a say in who becomes President in the most influential country in the world, those of us who were not even being noticed suddenly gain the ear of traditionalist that otherwise would dismiss us.
As big as banking is, I believe mass adoption will come from something more entertaining like gaming. Banking will certainly play a big role. However for the culture to change, there needs to be excitement and relentless pressure. That can come from something we use everyday or the intense pressure that few activities attract like video gamers. You will not find any group more intense on an enduring mental level than we who put our brains up against the performance capabilities of the physical manifestation of electrons.
Whether a virtual general, player-vs-player warrior, or visually-spatially adept pilot, we would dare take on terminators, let alone those candy ass 24/7 corporate types, as digital gamers do not need to eat, sleep, and can die at the console. It's not an addiction, at least not for the majority, it's the free-flowing creative aspect of the mind that society through centuries of civilized living has, through inherent laziness sought to evolve out.
Game theory as applied to gambling is trivial. Game theory is merely a way for developers to try and leverage the creative capabilities of electrons in organized way.
Anyway, that last point probably went on longer than most readers would care. See, we can tolerate half-truths even in our banking system, but why do we play games if not for absolute honesty/challenge/creativity. For the admiration of others? Unlike physical sports, even if we have onlooking fans, our focus is already so close to 100% dedicated that the outside world has disappeared. If you, the reader, don't believe me about this focus, find a gamer, who has been going for a couple of hours and interrupt them.
Another thing you can try is either find a game you enjoy, or a fast-paced one and play for a few minutes, just a few, then read a couple of paragraphs. Take note of your speed, retention and especially your focus. Let yourself return to normal and try this again like a half hour later or the next day or whenever you can but just remember how you felt.
That boost that is 100x coffee I attributed to the dormant creative side of the mind that few artists ever access on this level. Crypto assigns value to the assets earned within this medium.
Not everyone will be a gamer, but everyone will realize that those electrons have value as do the intellectual properties they represent.
I didn't find almost anything in this long reply.
My knowledge is not enough to understand it.
Three main things I was creatively conveying:
Did that help clear up the creative clutter in my post?
Wow. Appreciate your amazing feedback @machnbirdsparo
Wyoming is definetly one of those states, that I've never even heard about (as a forigner). It's interesting that sometimes big changes are happening in places, which many do not even heard about.
Have a great monday ahead of you buddy,
Yours, Piotr
Indeed, a good many of Americans would not likely be able to point out the state on a map. I would not even be surprised if some polls showed lower than 50%.
I've never gotten to enjoy a trip to Wyoming but have come somewhat close. I gather it's like cold weather cowboy territory.
I'm already doing something similar with Binance and their new Visa card. I have both crypto and Fiat stored on Binance and when I want to make a payment, I just transfer some funds over to my card.
Binance and some similar applications were a big step. However a bank offers a lot of services and security or at least comfort that a lone crypto exchange cannot. If nothing else, just being called a back, will get the attention of the populis.
You nailed it @machnbirdsparo
Thanks for dropping by and your comment @alexbalan
I wans't aware that Binance does offer to store FIAT currency as well.
Oh yeah, though to be fair, some currencies are suspended for the time being. I stored some Euro on Binance so it's definitely possible and I think USD worked too among others.
Hi Piotr
This is indeed a fabulous news and it would be so easy if we can hold our fiat and crypto both in bank.
Not every one is familiar with buying process of crypto and Bitcoin and I hope with this new Kraken will change the scenario. Thanks for sharing this great post.
Resteem done.
Thanks for dropping by and your comment @alokkumar121
And appreciate resteem :)
alexbalan :)
That's me 😅. I also enjoyed the article very much 😄
shit. Wrong window lol.
corrected already :) thx again for reading and sharing your thoughts @alokkumar121
Thanks much Piotr. Its always great to share thoughts on your post. Its an opportunity that I never want to miss. Have a great day