Today’s episode will cover events happening the week ending September 18th, 2020. This week we’ll be talking about Kraken becoming a bank, and Uniswap’s protocol token that is quickly infiltrating centralized exchanges.
Full Show Notes:
(00:27) One of the big pieces of news this week is about the cryptocurrency exchange Kraken. On Wednesday, Kraken was granted a license to create a bank in the state of Wyoming. According to Decrypt, “This makes Kraken the first US crypto exchange to create a bank. Specifically, a “Special Purpose Depository Institution,” which means that Kraken can hold custody over digital assets, operate payment systems, and allow customers to easily switch between fiat and crypto.”
The bank is currently being called Kraken Financial, and is limited to US residents, with the unsurprising exception of my fellow New York State residents. Decrypt reports that the bank will launch by Q1 2021 at the latest, with a possibility of it launching before the end of the year.
So, what does this mean? Well, overall, in the long run, it is a monumental step in bringing crypto into the mainstream. A traditional bank that offers cryptocurrency products will likely make it much easier for non-tech savvy folks to engage with. For Kraken, it means “…the ability to operate in more jurisdictions…As a state-chartered bank, Kraken now has a regulatory passport into other states without having to deal with a patchwork state-by-state compliance plan.” according to Coindesk. For consumers, it means more product offerings, like digital asset debit cards and savings accounts. Eventually, Kraken Financial will offer traditional financial services and products, catered to cryptocurrency.
(01:46) As I said last week, DeFi is everywhere. That’s certainly the case this week as the decentralized platform Uniswap unveiled their Uniswap Protocol Token, UNI. According to a blog post released by Uniswap on Wednesday, “Having proven product-market fit for highly decentralized financial infrastructure with a platform that has thrived independently, Uniswap is now particularly well positioned for community-led growth, development, and self-sustainability. The introduction of UNI (ERC-20) serves this purpose, enabling shared community ownership and a vibrant, diverse, and dedicated governance system, which will actively guide the protocol towards the future. UNI officially enshrines Uniswap as publicly-owned and self-sustainable infrastructure while continuing to carefully protect its indestructible and autonomous qualities.”
Uniswap paid it forward to their userbase too, giving hundreds of thousands of their users an airdrop of at least 400 UNI. At the time of recording, UNI is trading at $8.45 a token, and rising. If you used Uniswap prior to September, there’s a good chance you having some UNI waiting for you. If you haven’t used Uniswap, but want to get in on the action, have no fear. Two major exchanges, Coinbase Pro and Binance, have listed the brand new UNI token within a day of it being unveiled. The coin is also being listed on a number of other smaller exchanges as well. Clearly, the UNI hype is real.
That’s it for this week’s episode of The Cryptocurrency Informer. Don’t forget – if you want to read more about each of these stories, go to talk.bitcoin.tax and click on The Cryptocurrency Informer link. Every episode is accompanied by a number of relevant links for each story, so you can do your own in-depth research on the topics that interest you.
Also, check out the latest BitcoinTaxes Podcast, where we spoke with crypto tax pros Matt Metras and Alex Kugelman about current events happening in the crypto taxation space, including the 2020 round of IRS educational letters, DeFi and IRS compliance, the important crypto update to the Draft Form 1040, taxing crypto staking, and challenges to IRS cryptocurrency taxation law. Alex and Matt are frequent guests, and our listeners always enjoy their episodes – this is the first time we’ve had them both on the same episode, so be sure to tune in to soak in all that glorious crypto taxation knowledge.
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Have a great weekend everyone – stay informed and stay safe!