Kraken’s Krak Card Launches — Krak Epidemic Incoming?

TLDR

• Kraken has released the Krak Card, which is connected to the Krak app launched back in June.
• Right now, it’s only available for EU and UK users.
• It offers cash back, no fees, and other features that are better than what most brick-and-mortar banks can offer right now.

The folks at Kraken continue to push the limits of what the platform can do. With a goal similar to Robinhood in becoming a one-stop shop for customers, Kraken unveiled a new product this week.

The exchange rolled out a new debit card and app features, positioning its Krak money app as a full-blown alternative to traditional banking for UK and EU customers. Hopefully, we can get this thing in the US sooner rather than later, because it’s pretty sweet. Let’s get after it.

Kraken Takes Aim at Traditional Banking 

Kind of a Robinhood pun there. We think it works. Anywho…

The company announced the launch of its new Krak Card and a suite of features for its money app, Krak, aimed squarely at replacing traditional bank accounts for users in the UK and the European Union.

The rollout includes a Mastercard-powered debit card offering up to 1% cashback, high-yield “Vaults” linked to DeFi protocols, and upcoming salary deposit capabilities (rumored). This positions Krak not just as a payment app, but as a primary financial hub where users can spend, send, and grow their assets — both crypto and fiat — all in one place.

Since its initial launch in June, the Krak app has reportedly been downloaded over 450,000 times across 130 countries. Now, Kraken is doubling down, aiming to evolve the app from a simple payment tool into what its executives call “the money app you use by default.”

Spend, Send, and Grow with Krak

The new Krak experience is built around three core functions designed to challenge the limitations of legacy finance.

Spend Anywhere with the Krak Card

The centerpiece of the new offering is the Krak Card, a debit card that lets users spend their assets anywhere Mastercard is accepted. It comes in both physical and virtual forms and promises a simple, rewarding experience:

• Multi-Asset Spending: Users can spend from a pool of over 400 crypto and fiat currencies. The app lets you set a spend order and converts it instantly at checkout. For example, you could pay for dinner by drawing from your EUR balance and topping it off with Bitcoin, all in a single transaction.
• Real Cashback: Every purchase earns 1% cashback, which can be paid out in your local currency or Bitcoin. Kraken emphasizes that this is “real cashback” with no caps, tiers, or gimmicks.
• No Hidden Fees: The card boasts no monthly fees, no foreign exchange (FX) fees, and no ATM withdrawal fees, making it a compelling option for global travelers.

Send Funds Freely

Building on its original promise to offer free and instant payments, Krak enables users to send cash and crypto to anyone, anywhere. Transfers between Krak users are instantaneous, eliminating the settlement delays common in traditional banking.

With named accounts and IBANs rumored to be on the horizon, users may soon be able to have their salaries paid directly into the Krak app. Bivu Das, Kraken’s UK Managing Director, noted that this could enable automations like instantly converting a portion of your paycheck into Bitcoin or moving it into a high-yield Vault.

Grow Your Assets with “Vaults”

Perhaps the most ambitious feature is “Vaults,” a new tool designed to generate yield on idle assets. By connecting to independently audited DeFi lending protocols, Vaults aim to offer returns that far exceed what traditional banks can provide.

Users can choose from different risk-adjusted strategies, managed by DeFi curators like Chaos Labs and Sentora:

• Balanced Yield: Up to 5.5% APY for steady, lower-risk growth.
• Boosted Yield: Up to 9.5% APY for those comfortable with moderate risk.
• Advanced Strategies: Potentially over 10% APY for experienced users.

Crucially, Kraken states these Vaults will have no minimum deposits or lock-up periods, offering flexibility alongside high-yield potential.

Is Krak a Bank? Not Quite

While Krak offers many features of a bank, it is not a bank and does not offer government-backed deposit insurance schemes like FSCS or FDIC.

However, under its UK and EU licenses, all customer fiat funds are safeguarded 1:1 in segregated accounts at regulated banks. This is different from the fractional-reserve system used by traditional banks. The company also states it does not rehypothecate, or lend out, client funds.

This strategy leans heavily on Kraken’s strong regulatory footing in Europe. The firm holds a Markets in Crypto-Assets (MiCA) license in Ireland and has been registered with the UK’s Financial Conduct Authority (FCA) since 2013.

Where We’re Going, We Don’t Need Banks

Ok, we totally ripped that off from Back to the Future. 

But with the way several of these platforms are forging ahead with features and plans, the days of the traditional bank may be numbered…at least for those who prefer crypto exchanges like Kraken and brokerages like Robinhood.

Kraken’s push to become an all-in-one financial app is part of a larger trend of crypto firms and fintech companies moving into the mainstream financial services space. By combining the convenience of neobanks with the unique opportunities of crypto and DeFi, Krak represents a significant step toward a future where digital and traditional finance are seamlessly integrated.

With a confidential IPO filing in the US and a fresh capital raise of $200 million (and a $20 billy evaluation to go along with it), Kraken is signaling its ambition to become a dominant force in the future of money. For now, users in the UK and EU are the first to get a taste of this new, everything-in-one financial world. We’re jelly. So jelly.