Kraken Dives into Traditional Markets: Targets US Stocks and ETFs

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.