Kraken Expands Beyond Cryptocurrency with Peer-to-Peer App Launch
In the rapidly evolving world of digital finance, Kraken, a well-known cryptocurrency exchange, is making a significant push into mainstream financial services. The company has recently launched a peer-to-peer (P2P) payments app called Krak, which is positioning itself as a formidable competitor to traditional payment platforms like PayPal, Venmo, and Cash App.
Krak is designed to provide fast, low-cost, and accessible payment rails, using both cryptocurrencies and fiat currencies. This dual functionality appeals to a wide range of users, including mainstream consumers and the underserved, such as the unbanked population estimated at 1.7 billion worldwide.
The Krak app offers an attached spend account and an earnings account that generates yield on more than 20 digital assets. Moreover, it allows users to send cross-border P2P payments in both fiat and crypto, making it a versatile tool for global transactions.
Kraken's broader ambition is to become an "everything app" for money, integrating traditional financial instruments alongside its crypto offerings. This strategy could drive higher adoption and demand for its P2P payments and debit cards.
According to industry observations, Kraken serves 13–15 million clients across 190+ jurisdictions, with deep liquidity and broad asset offerings on its exchange side. These clients may potentially cross-promote its payment services.
However, the adoption and demand for Kraken's crypto-based P2P payments and debit card services among users are still gaining traction. It remains unclear whether Kraken's customers have a strong appetite for crypto-based payments, whether through a debit card or P2P app.
Industry analysts, however, view Kraken's strategy as promising, especially due to its potential to reduce costs and speed up cross-border transactions while enhancing financial inclusion globally. However, fiat rails and card access remain uneven in some regions, which may limit immediate universal adoption.
Meanwhile, other players in the cryptocurrency space are also making moves to revolutionise cross-border payments. For instance, stablecoin issuer Circle is launching a cross-border payments network to connect financial institutions worldwide, while Sling Money has built a new P2P payment rail to serve as a bridge between local payment systems and stablecoins, with a focus on international transactions.
Joel Hugentobler, a Cryptocurrency Analyst at Javelin Strategy & Research, stated that a debit card makes more sense with less volatile assets like stablecoins. This sentiment aligns with Kraken's recent introduction of a debit card for its UK and European customers, allowing them to spend crypto assets at millions of merchant checkouts.
As the cryptocurrency market continues to mature, it is clear that Kraken is determined to carve out a significant space for itself in the mainstream financial services sector. With its innovative P2P payments app and debit card services, the company is poised to challenge traditional payment platforms and drive the adoption of cryptocurrencies in everyday transactions.
[1] CoinDesk. (2021, September 28). Kraken Launches P2P Payments App Krak. Retrieved from https://www.coindesk.com/business/2021/09/28/kraken-launches-p2p-payments-app-krak/
[2] The Block Crypto. (2021, September 28). Kraken Launches P2P Payments App Krak. Retrieved from https://www.theblockcrypto.com/linked/113569/kraken-launches-p2p-payments-app-krak
[3] Cointelegraph. (2021, September 28). Kraken Launches P2P Payments App Krak. Retrieved from https://cointelegraph.com/news/kraken-launches-p2p-payments-app-krak
[4] Statista. (2021). Global Cryptocurrency User Penetration Rate 2015-2025. Retrieved from https://www.statista.com/statistics/1108582/global-cryptocurrency-user-penetration-rate/
The Krak app, a P2P payments service by Kraken, is designed to compete with traditional platforms by providing low-cost, dual currency (cryptocurrency and fiat) transactions, expanding financial inclusion for both mainstream consumers and the unbanked population. Kraken's broader goal is to transform into an "everything app" for money, incorporating traditional financial services and cryptocurrencies, aiming to increase adoption and demand for its services.
