Scott Melker discusses Kraken’s parent company, Payward, agreeing to buy a Lithuanian bank, making it the first crypto firm to own an EU bank and to offer deposits and lending alongside crypto services.
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Kraken parent Payward to become first crypto firm to buy a EU bank as it expands into deposits. Payward agreed, it hasn’t happened yet, to buy Lithuania’s Saldo Bank, which I know you’ve all heard of.
which holds $190 million in total assets, securing an EU license for depart deposits and lending. Okay, this is really, really important even though it may not
sound immediately important to you.
So, I’ve long covered all of the crypto exchanges and their activities in Europe, especially in context of Mika and the new regulatory regime, right? You’ve heard the stories about how Binance thought that they had a license from Greece, but at the last minute they were rug pulled by Christine Lagarde herself and unable to get a license. That’s about how crypto exchanges can operate in the in the European Union.
This is different.
buying a bank so that they can participate in the full suite of banking service including deposits and lending. Right? In the United States, there’s been much to do about nothing when crypto companies get a trust charter from the OCC, meaning that they can do some banking service, but not the key banking services that any of you think about, like going into a bank and depositing your money and getting a mortgage and lending and them lending your money and fractional reserve banking. That is what is happening
here. So this would probably close in 2027. It’s not happening immediately, but this combines crypto services with traditional banking capabilities, including depositing and lending in the European Union,
powered not by the banking side, but by the crypto side. So this is a complete change in my mind of the competitive landscape, right? You have a crypto exchange that wants to become a broader
financial firm, trading payments, borrowing, saving. Obviously, for customers, the appeal is that you have a one stop shop for all of your banking and crypto needs. And for Kraken, well, they can kill crypto exchanges and banks, their competition on both sides. I mean, we spent years trying to escape the banks, apparently the next step is to buy one.
Yes, I think that this is a big news. It probably will go through and we’re going to see a lot more announcements like this both in the European Union and you would have to imagine we will also see it beyond because once this precedent is set, there is probably no going back.
