It appears that Kraken is finally starting to move to the point where they bring the Kraken Bank to life.  Approved in the Wyoming in 2020, the company is looking to roll out services to its existing customers.  This will operate under the state's banking laws, the first company to be issued such a license.

This is a step forward for the masses.  However, it is not the ultimate solution since it is nothing more than a different captain at the head of the ship.  Much in the same way as [Coinbase](https://leofinance.io/@leoglossary/leoglossary-coinbase) is just a different version of TDAmeritrade, Kraken Bank is another spin on Wells Fargo.

Certainly the focus is different yet it is still approach cryptocurrency as a new [asset](https://leofinance.io/@leoglossary/leoglossary-asset) class.  Instead of realizing that we have the [technology](https://leofinance.io/@leoglossary/leoglossary-technology) to potentially change the entire financial system, we have people trying to recreate the existing model.  Of course, at the center of it is control.

To me, the lesson of 2022 was [Not Your Keys, Not Your Crypto](https://leofinance.io/@leoglossary/leoglossary-not-your-keys-not-your-crypto).  Yet in the past couple days we saw both Kraken and Coinbase make moves to bring [custodial](https://leofinance.io/@leoglossary/leoglossary-custodian) services to the masses.  

Once again, this is exactly what [Satoshi](https://leofinance.io/@leoglossary/leoglossary-satoshi-nakamoto) was trying to get around when the [Bitcoin White Paper](https://leofinance.io/@leoglossary/leoglossary-bitcoin-white-paper) was introduced.  Adding more [counterparty risk](https://leofinance.io/@leoglossary/leoglossary-satoshi-nakamoto) to the equation doesn't make much sense especially if the infrastructure is put in place to operate in a completely different manner.

![image.png](https://images.hive.blog/DQmRFtcf3289BRZvHuqfRyKntxAP8oRy8d6YJjmBKLB2LGt/image.png)

## Ecosystem Not Company

The world has a need for banking and financial services.  At the heart of the matter is not what they offering as much as who is doing it.  [Banks](https://leofinance.io/@leoglossary/leoglossary-bank) are known for their unethical behavior while having spend decades (if not centuries) building an exclusive system.  This is something that [cryptocurrency](https://leofinance.io/@leoglossary/cryptocurrency) can change.

Of course, while some might feel that the likes of Kraken and Coinbase are the answer, they are only, at best, temporary measures.  If they become wildly successful, the same [Wall Street](https://leofinance.io/@leoglossary/leoglossary-wall-street) predators will buy them out.  Hence, we would be back at the same starting point.



There is another problem.

>Kraken further promises the promotion of [digital asset](https://leofinance.io/@leoglossary/leoglossary-digital-assets) adoption and improved client experience through its bank via "a more seamless" integration between crypto and the traditional financial system. 

<center>[Source](https://cryptonews.com/news/kraken-crypto-exchange-disrupt-traditional-banking-with-launch-of-its-own-bank-for-digital-assets-heres-what-you-need-know.htm)</center>

The company is taking the stance of the new technology integrating with the traditional system.  This is the direct opposite of what we discuss on here.  Our approach is to build [DeFi](https://leofinance.io/@leoglossary/leoglossary-decentralized-finance-defi) and then, if it desires, let the [TradFi](https://leofinance.io/@leoglossary/leoglossary-tradfi) connect to it.

Again, Kraken is just putting a new spin on the same ole existing framework.

For that reason, we have to look at things completely different.  At the core of what we proposed on here is the idea of community.  Instead of having a company at the center of it all, we have an [ecosystem](https://leofinance.io/@leoglossary/leoglossary-ecosystem-digital).  This shifts the business structure from what we are accustomed to something more decentralized, perhaps a [DAO](https://leofinance.io/@leoglossary/leoglossary-decentralized-autonomous-organization-dao).

For example, the idea of [the Hive Financial Network](https://leofinance.io/@taskmaster4450/introducing-the-hive-financial-network) carried some of the ideas that Kraken is looking to offer.  This concept was to provide [financial services](https://leofinance.io/@leoglossary/leoglossary-financial-services) to the ecosystem.  However, instead of a company being behind it, we have the Hive ecosystem.  

Hive already has the [Decentralized Hive Fund](https://leofinance.io/@leoglossary/leoglossary-decentralized-hive-fund-hive), a DAO that was in place as soon as the [blockchain](https://leofinance.io/@leoglossary/blockchain) went live.  We have a funding mechanism that could be utilized to create such a system, most of it at the [second layer](https://leofinance.io/@leoglossary/leoglossary-layer-2).  Of course, we have to keep in mind that Hive has a native [stablecoin](https://leofinance.io/@leoglossary/leoglossary-stablecoin). 

This is a big advantage to the buildout of something like this.

## Economic Productivity

This is a concept that is rarely discussed in cryptocurrency.  How often have we heard mention of the economic productivity tied to Ethereum?  As we move further towards the idea of the [network state](https://leofinance.io/@leoglossary/leoglossary-network-state), we need to keep considering these ideas.

A financial [network](https://leofinance.io/@leoglossary/leoglossary-network) is meant to fund economic productivity.  Certainly, [speculation](https://leofinance.io/@leoglossary/leoglossary-speculation) has taken over to a large degree, a fact that skews the basic need.  However, the existing system finances hundreds of trillions of [dollars](https://leofinance.io/@leoglossary/leoglossary-u-s-dollar) in [trade](https://leofinance.io/@leoglossary/leoglossary-trade) and [commerce](https://leofinance.io/@leoglossary/leoglossary-commerce).  This is an important point to consider.

Hive is building assets. There is real value being created here, albeit slowly.  The [bear market](https://leofinance.io/@leoglossary/leoglossary-bear-market) does not help matter yet that is secondary anyway.  Economic productivity comes from the builders, the [entrepreneurs](https://leofinance.io/@leoglossary/leoglossary-entrepreneur) who look at something and establish a [business](https://leofinance.io/@leoglossary/leoglossary-business) around it.  As stated in the past, each Hive [account](https://leofinance.io/@leoglossary/leoglossary-account) is effectively a business.

For now, we reside in the [digital](https://leofinance.io/@leoglossary/leoglossary-digital) realm.  That said, we depend upon the [network effect](https://leofinance.io/@leoglossary/leoglossary-network-effect) to bring in users to the different applications.  A game like [Splinterlands](https://leofinance.io/@leoglossary/what-is-splinterlands) is a prime example of what can happen.  During the last bull, due to the growth of the game, many were holding small fortunes with their decks.  These were assets that had (and still do albeit less) value.  That is a foundation for greater economic productivity.

This is how the system can feed into itself and finance what is needed.

## In Conclusion

What is happening with Kraken and Coinbase is a positive for one simple reason: interference.

Anything that places a barrier between the regulators or [governments](https://leofinance.io/@leoglossary/leoglossary-government) and the industry is a help.  They become allies because their business models are designed to profit off cryptocurrency.  Sure, they are acting as gatekeepers, leopards with different spots.  For now, we can use all the help we can get.

That said, we have to use the cover they provide to develop a true change to the financial system.  A lot of [infrastructure](https://leofinance.io/@leoglossary/leoglossary-infrastructure-computer) is still required.  That means having the time to generate true DeFi options that can satisfy the needs of the global population.  

As always, we are looking to create reserveless, private bank [money](https://leofinance.io/@leoglossary/leoglossary-money) without the banks.

We do not get there by building more banks that are centralized.



___
If you found this article informative, please give an upvote and rehive.



https://images.hive.blog/0x0/https://files.peakd.com/file/peakd-hive/doze/MkkDNhyH-2020_04_13_16_57_48.gif

gif by @doze

![screen_vision2025_1.png](https://images.hive.blog/DQmXEv6MvKTCurBzSdbKjWzFadJwfJfJfmA2We9EwD5q5Vb/screen_vision2025_1.png)

logo by @st8z

* [What is Hive](https://leofinance.io/@leoglossary/leoglossary-what-is-hive)

Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@taskmaster4450/kraken-and-the-hive-financial-network)