Kraken is launching a crypto bank!

[Quidat]

One thing is good with Kraken launching their own bank, (besides Kraken earning more money only for them) and that is less chance of getting ban from your bank if you are using it to buy or sell crypto, and that is just in case regulators don't change some rules and regulations.
Bitcoin should be your main 'bank' not kraken, but until people accept it in more places, you need to sell and buy at some point.

It does really have its pros and cons though but to sum it up then its fully contrary on crypto is created in the first place specially Bitcoin.It doesnt need any banks or related service.
Of course, when you do tend to make use of such bank then policies and regulations can really be altered or be changed as they like and its one of the risk.Also, we know that
no your keys not your coins line.. Its totally different when you let them handle out your coins rather than holding your own completely but somehow in overall negatives that we had
mentioned we cant really deny that it does have some pro's which can really ease the hassle when you do tend to crypto-fiat and fiat-crypto transactions and since they had
been collaborated then expect that there would be no headaches along the process but in exchange, your privacy and the full control of your coins. So you would need to choose!

[figmentofmyass]

I found this quote particularly interesting:

For instance, Kinitsky said the firm could launch a crypto debit card, a yield account product, or an IRA product. Its banking status could also allow it to offer services in stock, derivatives or commodities trading, he added.

It would be fantastic if you were able to deposit bitcoin and buy stock with it, and having a legitimate "yield account product" which I assume is an interest-earning savings account, except with crypto and not fiat, would be freakin' awesome.

it's just wrapping a pretty bow around third party custodial risk. i'm not particularly comfortable with people locking bitcoins up in defi smart contracts to farm yields. i'm even less comfortable with people depositing bitcoins to trusted third party custodians to realize those yields.

high-yield savings accounts are justifiable for depositors because of things like FDIC insurance. there will be no such insurance on your bitcoin savings accounts at kraken!

[DooMAD]

The new structure was purpose-built for cryptocurrency companies and will allow Kraken to offer certain banking functions to clients and effectively serve as the exchange operator's primary banking relationship.

So their main objectives aren't normal users

I think you've shined a spotlight on the key takeaway with this.  It makes sense that their priority would be businesses.  There's a gap in the market due to most banks refusing to deal with companies that are involved with crypto.  Businesses need a service like this.  HODLers don't.

[crwth]

With the current history of us humans, it seems inevitable that there would be no governing authority. I believe they are just both protecting their company and protecting the users/members of the bank to be able to participate in stock offerings with cryptocurrencies. It's not yet the end of this for sure. I think there would be more to follow with regards to Kraken launching.

I guess it's something as long as it supports the cryptocurrency world. It's just up to the users whether or not they would like to put their holdings into Kraken and let them play with it.

[NotATether]

One thing that hasn't been mentioned in this thread yet, is how designating Kraken as a bank will cause it to make their KYC more organized. Kraken will be forced to keep accounting of their users' documents, if only so the Feds can inspect some of them later. So at least documents aren't scattered eveywhere like dirty clothes in the boy's bedroom.

There are srill no official guidelines on how to get the identities of exchange users, so you have some asking for your utility bill, others asking for your passport, others your driver's license, others your tax returns and some even make you do live video sessions! Even fiat services like Paypal ask for any of these documents as well, so it shows that nobody drafted a standard ID verification method to be used universially in the banking world.

If some average exchange that takes documents places them wherever they want, with no policies on how they can be accessed and who's allowed to access them, then when they get stolen, they're going to deny it happened and it takes a long period of legal battles to hold them accountable for what they let happened. So at least if Kraken gets in a scandal with users' documents, the Feds will hammer them quicker given their new government connections.

Kraken is not too big to fail yet, as long as cryptocurrency stays niche.

[tranthidung]

I don't use any bank if I can. Be my own bank whenever I can be!

By becoming a bank we get direct access to federal payments infrastructure, and we can more seamlessly integrate banking and funding options for customers

This part is attractive for people who are lazy and prefer convenient features but don't care about their privacy and anonymity. There are exchanges and marketplaces that allow you to add your bank accounts (for payments, trades, withdrawals) to your crypto exchanges or marketplaces. Unfortunately, I see risks in such convenient feature and I don't use it. If your account is hacked, your bank account information can be exposed with bad guys.

Same thing for publicly shows bitcoin addresses to trade partners on your profile pages. It breaks your anonymity and people who use it should read about Change address Change (from Bitcoin wiki)

Anyway, each person has different needs and preference and are free to choose what to do.

[Wexnident]

I'm guessing this is nice to whoever regularly uses centralized exchanges since it probably gives off more security as well as more options, but that's about it. I really doubt the disadvantages there normally was disappeared, it's still not you holding your funds, it's still possible for your money to be hacked from them. A plus would probably be there'd be no way for you to get arrested since it's an official exchange now, though of course that just gives them more excuse to ask for personal information.

This part is attractive for people who are lazy and prefer convenient features but don't care about their privacy and anonymity. There are exchanges and marketplaces that allow you to add your bank accounts (for payments, trades, withdrawals) to your crypto exchanges or marketplaces. Unfortunately, I see risks in such convenient feature and I don't use it. If your account is hacked, your bank account information can be exposed with bad guys.

Well that is the cause and reason for the development of banks, or for any type of development after all. To make most movements automated so that humans could have a part of time that they could just enjoy themselves, and not bury themselves under work. There's always a price for convenience, whether it be money, information, or anything since nothing really is free, if you're having the time of your life, someone else is suffering from you enjoying life kind of thing.