Coming Up: World’s First Cryptocurrency Bank

Kraken, a popular Bitcoin trade exchange, and Fidor Bank AG, Germany’s internet direct bank, are teaming up for an initiative to establish a specialized bank for crypto-currencies. The initiative will create one-of-a-kind licensed and regulated financial service sentity from the virtual currency sector. The objective behind this partnership is to bring together products and services from various providers of cryptocurrencies and eventually offer a range of financial products and services based on them.

Besides Kraken, Fidor has also partnered with Ripple Labs and in order to showcase itself as a promising and innovative banking partner in the world of digital currencies. Through such partnerships, Fidor has been developing expertise and a wide ranging network in the cryptocurrency domain. In order to establish the bank, Fidor will provide regulatory expertise, a core banking platform and licenses.

The bank will also provide technical support via its IT-service subsidiary Fidor TecS AG which already provides a banking, payment and community software program called fidorOS. The fidorOS platform provides optimal support to digital customer groups and helps in integration of third-party offerings through an open API-based infrastructure.

Matthias Kröner, CEO of Fidor Bank AG, said in an official press release: 'As a bank regulated in Germany we are pleased to be the first point of call for this significant international initiative. Conversations with existing and potential new partners have strengthened our conviction in enabling a more focused handling of alternative currency initiatives, like bitcoin. The aim of this initiative is to establish a specialized banking platform for crypto-currencies. Products and services from various providers of virtual assets like bitcoin (e.g. exchanges, payments, trading) are to be bundled in a kind of 'crypto-currency-marketplace. We want to build a regulated and specialized banking home for entrepreneurs and retail customers who are intrigued by the idea and vision of a virtual currency system. But this, we cannot and we will not do on our own.'

Kraken would be contributing towards the new initiative by aiding in safe storage of crypto-currencies and its trading and exchange. Fidor can also look forward to leveraging Kraken’s broad experience and network in the cryptocurrency community. Kraken already serves around 100,000 clients all over the globe. Kraken has the capabilities to offer advanced trading tools, sophisticated user interface, robust technical security and full regulatory compliance.

Jesse Powell, CEO of Kraken, said in an official press release: 'We are extremely excited about the opportunity to deepen our partnership with Fidor, to leverage the experience we've gained working together over the past year, and to benefit the broader crypto-currency community, industry and ecosystem. We hope that in opening up our relationship and expanding our circle of trust, we'll see the industry grow, regulators become more comfortable, and other banks thaw out. I'm a strong believer in leading by example and Fidor have proven to be no different, which, in the banking world, makes them unique and sets them in a class above the rest. This is a huge leap forward for the crypto-currency movement.'

Other third party companies who wish to join the initiative are required to have the necessary expertise and a professional setup including funding as well. They are also required to comply with the regulatory rules and must be capable of handling anti-money-laundering processes, full customer authentication, etc. By this year end, Kraken, Fidor and other selected partners would start the process of establishing the core of the future banking platform.