The cryptocurrency exchange Kraken plans to expand its
services by venturing into the US-listed stocks and the exchange-traded funds
(ETFs) sector. According to a report by Bloomberg, Kraken is preparing to
introduce trading services for traditional assets, with a target launch date
set for 2024.
These services will be offered through a newly established division known as Kraken Securities, which is expected to
facilitate stock and ETFs trading. The division initially catered to customers in the
United States and the United Kingdom.
Kraken’s Regulatory Compliance and Expansion
Kraken has reportedly taken proactive steps to ensure
regulatory compliance and secure its position as a legitimate player in these
markets. Notably, the exchange has already secured the necessary regulatory
permits in the United Kingdom and has submitted an application to the
Financial Industry Regulatory Authority for a broker-dealer license in
the United States.
The expansion follows a challenging year for the cryptocurrency
industry, which ensued Bitcoin’s peak of nearly $69,000. However, this shift
into equities is not without its challenges, as Kraken will enter a competitive
landscape populated by zero-commission platforms like Robinhood Markets.
Upon the launch of stock trading services on Kraken, eligible
customers will have the opportunity to activate this feature. Those who do so
will see their portfolios, comprising crypto, stocks, and ETFs, presented as a single balance. This integration aims to streamline the trading experience and
offer customers greater convenience.
Kraken’s expansion into equities is not an isolated
endeavor. The exchange is strengthening its prime brokerage services
concurrently and preparing to launch custody services for institutional
clients in the coming weeks. The custody service will operate independently
from the exchange, and Kraken has sought approval from the state of Wyoming for
this initiative, sources familiar with the matter told Bloomberg.
Kraken Eyes Geographical Expansion
On top of that, Kraken has strengthened its presence in
Europe. The exchange has announced two pivotal authorizations. The Central
Bank of Ireland recently granted Kraken the status of an E-Money Institution (EMI),
and the company has successfully registered as a virtual asset service provider with the Bank of Spain.
Kraken’s EMI license, held by its Irish subsidiary, opens
the door to a broader range of services in the European market. It enables Kraken to extend its fiat services in Euros in collaboration with
European banks. Notably, this expansion encompasses clients across 27
European Union member states and European Economic Area countries.
This article was written by Jared Kirui at www.financemagnates.com.