Kraken Expanding Offerings in Trading and Payment
Kraken, a leading cryptocurrency exchange, is taking strategic steps to enhance its trading and payment options. By leveraging its subsidiary Crypto Facilities, which was acquired in 2019, Kraken aims to tap into the lucrative derivatives sector. Last month alone, centralized exchanges recorded an impressive $1.85 trillion in trading volume for derivatives. Additionally, Kraken is diversifying its payment methods by introducing PayPal deposits for its customers in the UK and Europe.
Crypto Facilities Seeking Expansion Approval
Crypto Facilities is currently in talks with the UK’s Financial Conduct Authority (FCA) to extend its custodial services. The London-based unit intends to offer futures contracts denominated in fiat currencies like euros and pounds. This expansion is an upgrade over its existing license as a multilateral trading facility granted in 2020. CEO Mark Jennings envisions these advancements to be implemented within the next six to twelve months. Jennings remains cautious about the immediate market recovery as the trading volume has declined significantly from $700 to $800 million per day prior to the downfall of FTX.
Enhanced Payment Features by Kraken
Kraken is also making progress in enhancing its payment infrastructure. The platform recently introduced support for PayPal deposits in the UK and Europe, initially available only on the mobile app. This feature allows users to efficiently fund their accounts with a 2.4% fee and has the potential to make cryptocurrencies more accessible to a broader range of users. However, utilizing this service requires passing an Intermediate or Pro level verification, and users can deposit up to £1,000 ($1,250) daily, with a seven-day withdrawal hold.
Broader Trend: US-based Crypto Platforms Eyeing Global Expansion
The developments carried out by Kraken align with a larger trend in the cryptocurrency industry, where US-based platforms are exploring global expansion in response to increased scrutiny from regulatory bodies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Kraken has recently discontinued its crypto staking services in the US as part of a settlement with the SEC.
Hot Take
Kraken’s strategic moves to expand its offerings in both trading and payment indicate the platform’s commitment to staying at the forefront of the evolving cryptocurrency landscape. By targeting the derivatives sector and introducing convenient payment methods, Kraken aims to cater to the diverse needs of cryptocurrency traders and investors. As regulatory attention intensifies, global expansion becomes a viable option for US-based platforms like Kraken to ensure their sustainability and adaptability in the face of changing market dynamics.
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