someone already posted a thread about this subject which is this link https://bt.irlbtc.com/view/5276235

not the kind of transition that a crypto fan would like but its happening. very disappointing but maybe an indication that crypto adoption could be widely be accepted. banks will still have a place in the future.

I don't know what makes you disappointed about this news, but possibly that's the future. As a crypto fan, if you want to see adoption among the masses, this is the way forward! I think you should be cheering about this news because a crypto exchange is now named as a special purpose bank instead of seeing a mainstream bank named as a crypto company! I am sure we will be seeing more and more such news from around the world because Banks will have to with evolve or they will loose the battle of business in the future world.

I find such kind of news amazing because it excites me about the inclusion possibility that cryptocurrencies will be enjoying. Think about the credibility factors as well. Cryptos are lacking that part big time. Such kind of news will level the playing field for cryptos in the world of economy!

Maybe actually read the article first?

"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."

It's basically so instead of them bowing down and kneeling to every hurdles and requirements certain banks require them and prevent them from doing, they'll start their own bank instead to prevent these unnecessary problems; hence making their operations a lot easier.

Ironically I made a thead a few days ago pointing out how US banks went zero reserve.

The thing is, your average exchange has to stay full reserve, because if they go fractional reserve and suddenly everyone dumps their  platform, some users won't get their money since the exchange will be insolvent, and a scam accusation and legal charges can be brought against the exchange.

Coincidentially, the above doesn't happen to fractional reserve fiat banks, they're bailed out or simply bankrupted instead

This is a positive move in the right direction, but it is a small step forward to be honest. A particular state in USA declaring a crypto exchange as a legal entity does not matter much in the grand scale of things.

What matters is the big banks approving BTC and other popular cryptocurrencies as payment methods which would help push crypto adoption rates through the roof around the world.

This is only possible of the governments regulate cryptocurrencies in an efficient and effective manner.

Base on their statement, I presumed they will cause the 3rd party habit towards cryptocurrency to fiat seems to be the reason they fight for SPDI bank charter which will allow Kraken to perform the role independent bank instead of relying on financial institutions.
If Binance and other big exchange site could do the same there's a huge chance for crypto to be mainstream of payment before the end of this year.

Your presumption about Kraken to be more centralized is the truth but they don't have a choice if they wanted to achieve the charter bank approval they have to accept some government rules and the same thing will happen in the future if we want crypto to be mainstream.
Concern Kraken to be a big competitor to Binance, anything is possible but they will have to constantly in creating new features.

Though I'm not quite enthusiastic about Kraken or exchanges becoming banks, still this is some positive news, because Bitcoin-related business was allowed to work under better conditions, so it's a sign that at least the US won't be banning Bitcoin anytime soon, and hopefully they won't overregulate it either.

Banks that hate cryptocurrencies are now slowly turning into accepting crypto clients. It will be a matter of several years before almost all the banks would be opening up their doors to cryptocurrency. This is unstoppable as even countries are already giving cryptocurrencies their legal status.

And with the opening of this Kraken as a crypto bank, other banks that are still hating cryptocurrency should think twice and reconsider their stand. They should get threatened now. Crypto companies are now very capable of creating their own banks if they get rejected by the old banks.