Kraken Embeds Crypto Services into bunq, Expands European Reach by 400%

Kraken, a prominent crypto exchange, has recently demonstrated its agility and strategic prowess by embedding its services into the platform of bunq, a Netherlands-based neobank. This integration, facilitated through Kraken’s new business solution called Kraken Embed, was completed within a matter of weeks, showcasing the exchange’s ability to meet tight deadlines and expand its market presence.

According to Brett McLain, Kraken’s Head of Payments and Blockchain, the collaboration with bunq was initiated at the eleventh hour. Bunq, which was initially planning to partner with another firm for integrating crypto into its platform, turned to Kraken at the last minute. The service went live shortly after bunq’s team verbally agreed to it, requiring minimal engineering efforts. This swift integration allowed bunq to offer over 400 crypto assets to its users in Europe, a heavily regulated market, marking a significant shift for the neobank.

Kraken Embed not only accelerates the integration process but also helps firms save on engineering, regulatory, and legal costs. Under the EU’s Markets in Crypto Assets Regulation (MiCA) regime, this solution enables firms in Europe to offer crypto trading to their customers without needing a license. This regulatory advantage positions Kraken favorably in the competitive crypto landscape, where it faces stiff competition from exchanges like Coinbase and Binance.

The ability to attract new users through Kraken Embed could potentially level the playing field for Kraken, especially as it contemplates an initial public offering this year. The recent data breach at Coinbase, where some support agents were bribed to reveal sensitive user information, adds another layer of complexity to the competitive dynamics. While the incident is estimated to cost Coinbase up to $400 million to remedy, experts do not see it as a significant hindrance to the exchange’s growth. Kraken, too, has faced security issues in the past, including a bug that allowed a user to artificially inflate their balance.

Neobanks and fintech firms are known for their rapid feature rollouts, while traditional institutions tend to be more deliberate. Under the previous U.S. administration, the crypto industry anticipated a surge of interest from Wall Street firms as legislative initiatives and regulators worked to clarify industry rules. With 17 million users across Europe, bunq’s decision to partner with Kraken could significantly extend Kraken’s user base, which currently stands at 13 million users worldwide. Kraken expects to secure more partnerships with firms of similar caliber this year, potentially expanding into the U.S., Canada, Australia, and the UK.

Coinbase also offers a similar crypto-as-a-service (CaaS) solution, allowing firms to leverage its markets and infrastructure. Recently, Coinbase announced that online trading platform Webull will utilize its leading CaaS platform. This move underscores the growing trend of crypto exchanges providing embedded solutions to traditional financial institutions, neobanks, and fintech firms, driving user growth and market penetration in the competitive crypto landscape.