Kraken's Bunq Partnership And The Global Battle For Crypto Users

Crypto-exchange Kraken is not afraid to meet tight deadlines. The organization is setting its sights on growing its brand and market share with a new solution called Kraken Embed, says Brett McLain, Kraken’s Head of Payments and Blockchain. Kraken recently partnered with Dutch neobank bunq, a decision that was only made at the last minute.

Bunq initially planned to partner with another party for crypto integration, but switched to Kraken at the '11th hour'. Within weeks of the verbal agreement, the partnership was up and running, with minimal engineering effort. This is remarkable. A neobank with no crypto exposure whatsoever, offering 400-plus assets in such a short time in a heavily regulated market like Europe, is truly revolutionary.

In addition, this solution reduces the cost of engineering, regulatory and legal issues. With Kraken Embed, companies in Europe can offer their customers crypto trading without having to obtain a license under the EU crypto asset regulation, known as MiCA.

Despite stiff competition from big names like Coinbase and Binance, Kraken has the opportunity to attract new users and position itself on an equal footing with its Embed offering. Kraken is even considering going public this year. For companies looking to enter the crypto space, the choice between Kraken and Coinbase may now take on a new meaning, as Coinbase has struggled following a recent data breach that exposed sensitive user information.

Surprisingly, the cyberattack could cost Coinbase up to $400 million to fix. While this situation is unlikely to hinder the exchange’s growth, it does cast a shadow over its reputation. Kraken has also faced security issues in the past, such as a bug that allowed users to artificially inflate their balances.

Neobanks and fintechs are used to rolling out new features quickly, while traditional institutions are often slower. Under US President Donald Trump, increased interest from Wall Street is also expected, as legislative initiatives and regulators prepare to clarify crypto rules in the coming years.

With 17 million users in Europe, bunq’s decision to partner with Kraken could significantly expand the exchange’s user base beyond the 13 million people considered “trusted” globally. Kraken is committed to signing more firms of similar size this year, potentially in the US, Canada, Australia and the UK.

Coinbase has similar solutions, offering their infrastructure for crypto services, but the partnership between Kraken and bunq shows that the race for the best crypto solutions is far from over.

Frequently Asked Questions

What is Kraken Embed and what does it offer?
Kraken Embed is a new solution that allows neobanks and other financial institutions to integrate crypto trading into their platform without the need to obtain a license under EU regulations.

Why did bunq choose Kraken?
Bunq decided to partner with Kraken at the last minute because they wanted to provide a solution for crypto investors quickly. This partnership started very quickly with minimal engineering efforts.

How does Kraken compare to competitors like Coinbase?
While Kraken faces strong competition from Coinbase and Binance, the new Embed solution offers opportunities to attract users and thus strengthen its position in the market. Due to the situation at Coinbase, Kraken can now also benefit from the growing distrust towards this competitor.