Kraken, one of the largest cryptocurrency exchanges in the world, is considering offering traditional stocks and exchange-traded funds (ETFs) to its users. The company’s CEO, Jesse Powell, revealed this plan in an interview with Bloomberg on September 28, 2023.
Summary: This news article reports that Kraken, a major crypto exchange, is considering offering traditional stocks and ETFs to its users. The article explains why Kraken is interested in this move, how it differs from other crypto exchanges, and how it plans to deal with regulation.
Powell said that Kraken is exploring the possibility of becoming a “one-stop shop” for investors who want to diversify their portfolio with both crypto and non-crypto assets. He said that the company is looking at various options, such as partnering with a broker-dealer or acquiring a license to offer securities directly.
“We’re looking at all kinds of things,” Powell said. “We’re always looking for new ways to provide value to our clients and to bring new people into the crypto space.”
Powell added that offering traditional stocks and ETFs would also help Kraken attract more institutional investors, who may have regulatory or compliance requirements that prevent them from investing in crypto-only platforms. He said that Kraken already has a large institutional client base, which accounts for about 25% of its trading volume.
Kraken is not the first crypto exchange to venture into the traditional finance space. In July 2023, Coinbase, the largest U.S.-based crypto exchange, announced that it had received approval from the Securities and Exchange Commission (SEC) to offer securities trading through its Coinbase Pro platform. Coinbase said that it would initially offer a range of crypto-related securities, such as tokenized stocks and ETFs, but that it would eventually expand to other types of assets.
However, Powell said that Kraken is not interested in offering tokenized stocks or ETFs, which are digital representations of real-world assets that trade on blockchain platforms. He said that these products are too complex and risky for most investors, and that they do not provide the same benefits as owning the actual assets.
“We’re not really interested in creating synthetic versions of securities, We think that people should have access to the real thing.”Jesse Powell
Powell also said that Kraken is not worried about the regulatory challenges that may arise from offering traditional stocks and ETFs. He said that the company has a good relationship with regulators around the world, and that it is prepared to comply with any rules or standards that may apply.
“We’re always trying to be ahead of the curve and proactive with regulators,” Powell said. “We’re not afraid of regulation. We think it’s a good thing for the industry and for consumers.”