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Bakkt shares statement on crypto regulation’s role in promoting financial inclusivity

Bakkt recently had the opportunity to submit a statement for the “Connecting Communities: Building Innovation Ecosystems Across America” hearing, held by the House of Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion.  

At Bakkt, we believe that a regulated and transparent crypto market can enhance financial inclusivity by connecting communities and lowering barriers to entry for those looking to participate in the local and global economies. A clear and comprehensive regulatory environment, for which Bakkt continues to advocate on Capitol Hill, can provide higher levels of security for businesses and customers, while allowing for responsible and compliant crypto players—like Bakkt—to develop better and broader use cases for these technologies.   

Since its inception, Bakkt has aimed to serve as an example of how to engage conscientiously in the crypto industry. We support the Committee’s work and look forward to our continued engagement with Subcommittee Chairman Hill, Congress, the SEC, CFTC, NYDFS and other federal and state regulators as a fuller regulatory framework for the industry is developed.   

 See our full statement below:  

 Bakkt Holdings, Inc. Statement for the Record  

House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion 

“Connecting Communities: Building Innovation Ecosystems Across America” 

December 8, 2023  

Bakkt Holdings, Inc. (NYSE:BKKT) appreciates the opportunity to submit the following testimony in conjunction with the Subcommittee’s hearing entitled “Connecting Communities: Building Innovation Ecosystems Across America.” As a digital asset platform focused on the development of safe, secure and regulated financial service technology, we share the Subcommittee’s goal of ensuring that any reforms made to the digital asset sector can accomplish the goal of enhancing financial inclusiveness.   

But we also must honestly understand that—contrary to the view of many policy makers and the public—the cryptocurrency market exists, or should exist, for more than just providing a place for risk takers to speculate on the value of cryptocurrency.  It is the burden of responsible participants in these markets to articulate a better and broader use case for these technologies and markets and how, within the appropriate regulatory environment and in a safe and secure manner, they can serve important societal goals relating to reducing costs in, and increasing access to, the financial system.  

Bakkt’s Approach to Compliance:  

Founded in 2018, Bakkt builds solutions that enable businesses to grow with the crypto economy.  Through institutional-grade custody, trading, and onramp capabilities, our clients leverage technology that’s built for sustainable, long-term involvement in crypto.  We offer ways to activate crypto capabilities via software-as-a-service (“SaaS”) and application programming interface (“API”), so that businesses can select the option that's best for their strategy and their customers.  Our institutional-grade technology platform is at the core of everything we do. It is secure and licensed, born out of our heritage with our former parent company, Intercontinental Exchange, Inc., which operates regulated exchanges and clearinghouses throughout the world. 

Our compliance measures, controls and rigorous risk management practices are at the core of how we operate.  From the beginning, we have separated our custody and exchange functions to minimize potential conflicts of interest.  We hold two BitLicenses and a limited-purpose trust charter from the New York Department of Financial Services, as well as money transmitter licenses throughout the US.  As a public company, we comply with SEC reporting obligations, including publicly disclosing our audited financial statements each year.  Since its inception, Bakkt has aimed to serve as an example of how to engage in the digital asset space in a responsible manner, through upholding the highest standards of transparency, security and compliance.      

Bakkt Works with Congress, Federal, and State Regulators to Enhance Regulatory Clarity:  

Bakkt is a strong believer in the need for appropriate regulation of cryptocurrency to enable the further development, refinement, and growth of crypto use cases.  If businesses and consumers are to realize the benefits of this technology, they must first feel secure that they are doing so through trusted intermediaries.  Indeed, we recently conducted a study finding that crypto consumers expect greater regulatory clarity to catalyze further adoption of the technology.1    

Unfortunately, the existing regulatory frameworks around this industry are insufficient to bring such clarity and comfort to businesses and consumers.  We are heartened by our conversations with Members of Congress, the SEC, CFTC, NYDFS, and other federal and state regulators that there is a desire to find a path forward.  We applaud the Subcommittee’s work in constructing a market structure framework that clarifies such regulatory authority, and creates an environment that is conducive to developing constructive use cases for this technology, thus enabling digital assets to transition from a purely speculative asset to an asset that can be used in safe, legal, local, and global commerce.  

Bakkt will continue to meaningfully engage Congress, the SEC, CFTC, NYDFS, and other federal and state regulators to foster a healthy collaboration between the private and public sector and to drive home the need of a proper regulatory framework for the digital asset industry.  

 Importance of Connecting Communities Through Digital Assets: 

As of 2021, 14.1 percent of all U.S. households (about 18.7 million) were considered “underbanked.”2  This figure represents a key challenge to the financial sector, as these Americans are restricted from using legacy financial instruments as a result of their banking status.  For example, being underbanked leads to the absence of credit history, which in turn makes it nearly impossible for an underbanked individual to qualify for a mortgage or auto loan, a credit card, or home rental, among other consequences.  Allowing consumers to use their digital wallets as an alternative or supplement to traditional depository institutions can allow these consumers access to credit and investment services.  Similarly, the use of digital wallets offers a way for users to secure their assets, and reduce the danger and infeasibility of keeping all of their assets in the form of physical cash.  

Additionally, the use of digital assets in everyday commerce will lower the cost of transactions, particularly as it relates to the transmission of cross-border remittances.  A 2021 report by the World Bank found that the average cost of sending a remittance of $200 is 6.5% globally.3  Those sending cross-border remittances tend to be disadvantaged by traditional financial institutions due to lack of credit history and the high cost stemming from the transaction fees associated with these remittances.  It is therefore not surprising that those who send remittances have increasingly looked to cryptocurrency as a way to lower the cost of transactions.  Indeed, according to a 2021 report, the majority of consumers sending remittances own cryptocurrency at about four times the rate of the general U.S. population, and half of consumers who send remittances own cryptocurrency.4  This is just one example of how blockchain and cryptocurrency technology has the promise to democratize the financial system in a safe, cost effective, and compliant manner.     


Bakkt appreciates the opportunity to provide testimony regarding how digital assets can better connect our communities and lower barriers to entry for those wishing to participate in both the local and global economy. Bakkt stands ready to assist the Subcommittee in providing feedback and perspective on emerging legislative and regulatory issues pertaining to digital assets.  


This does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell, or otherwise transact in any investment, including any of the product(s) mentioned herein, or an invitation, offer or solicitation to engage in any investment activity. This information is provided solely on the basis that you will make your own investment decisions, and Bakkt does not take account of any investor's investment objectives, particular needs, or financial situation. It is strongly recommended that you seek professional investment advice before making any investment decision.