Kraken became an Electronic Money Institution (EMI) with a new UK license. The exchange, focused on the European market, is adding new licenses to continue with fully regulated services.
Kraken acquired an Electronic Money Institution (EMI) license for the UK market. The Financial Conduct Authority (FCA) awarded the license, opening the doors to more innovative products on Kraken.
“The U.K. is on the brink of mass crypto adoption, and Kraken is poised to lead the way with industry-leading products. Securing an EMI license is a foundational step in our expansion strategy, and we’re thrilled to announce this authorization today,” said U.K. General Manager Bivu Das.
Kraken claimed over 7M British are crypto investors or about 12% of the adult population. The UK is one of the most active markets for several trends, including VC funding, DeFi, and Solana trades. The UK was also one of the top users of Pump.fun and meme token trades, though the country was banned from participating by the FCA.
The exchange will build several crypto and fiat products specifically for UK users. They will be able to build a portfolio and use some of the assets in their Kraken account as a source of liquidity. Kraken still offers over 300 assets, among them the most accessible regulated stablecoins. An EMI license may boost available sources of liquidity.
Kraken has offered GBP trading since 2014, with multiple direct fiat on-ramps and trading pairs, making local access to cryptocurrency easier. With the new license, Kraken will add even faster and more secure forms of payment processing.
The new regulatory status arrived about a month after Kraken acquired a MiFID license for operating within the Euro Area. The license allows for a wider selection of regulated derivatives.
Kraken is now set to diminish the number of stablecoins for its Euro Area operations. The UK has less stringent regulations for stablecoins, which may give Kraken more agility in its operations. The FCA has planned new rules for stablecoins for 2025, though none with a strict deadline, so the exchange may continue business as usual in the coming months. Kraken has partnered with UK regulators in the past, as the country has issued multiple requests for cooperation over the years. Kraken is also viewed as a legitimate company and one of the top 100 best employers in the UK.
Kraken still focuses on centralized services
Kraken is still ranked 10th based on its volumes, achieving about $1.5B per day. While the exchange is relatively small, its key contribution is the highly active pairs for USDT and USDC, serving as a fiat off-ramp. The exchange carries more than 33% of its daily volumes in the stablecoin pairings with the USD and EUR. Kraken has already proven to be resilient as an off-ramp for fiat sales, becoming one of the key markets to cash out of stablecoins.
Kraken also offers a native payment service, Kraken Pay. The exchange recently launched a native L2 chain, which however only carries around $4.6M in volumes and is just building up its liquidity. Kraken’s Ink chain mostly carries DEX operators, which are still building up their liquidity. Ink has not yet developed crypto lending apps.
Kraken’s Ink L2 native chain is also trying to show proof of decentralization. Ink was downgraded to a Stage 0 network as it could still push transactions through centralization. The chain has 140 days to repair its centralized features to receive a Stage 1 status.
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