Cryptocurrency exchange Kraken recently announced an expansion of its institutional custody services as it bids to attract more traditional finance players into the digital asset space.
After operating in the United States for years, their services are now available to clients in the United Kingdom (UK) and Australia. This move is designed to push its custody solution.
A Qualified Custody Model Goes Global
The San Francisco-headquartered company will offer its custody product via a Wyoming-chartered Special Purpose Depository Institution (SPDI), Kraken Financial.
Kraken Financial started giving crypto custody solutions to US clients last year, following a model that allows clients to differentiate their assets from the main Kraken trading platform.
It allows full, real-time access to withdrawals while avoiding any commingling. The distinction is particularly crucial for an industry still healing from damage done by FTX.
Bringing the UK and Australia into their service allows eligible companies to store, manage and transfer supported assets like Bitcoin (BTC), Ethereum (ETH) and USD Coin (USDC) on the Ethereum network.
Kraken Financial is keen on oversight and strict adherence to the US regulatory framework. They will likely adopt the same approach in their international operations.
Deepening Institutional Engagement
Kraken’s expansion responds to financial institutions, family offices and asset managers desperately seeking secure, compliant infrastructure to navigate crypto markets.
Institutional interest is increasing, especially in places with clear regulatory frameworks. The Kraken move is timely and strategic.
A Kraken Financial spokesperson said: “Institutions want to participate, but they want to do so in a way that’s secure, regulated, and built to last.
“Our global custody service reflects those needs and gives firms the infrastructure to scale their exposure to crypto.”
Kraken has also established a new partnership with ClearBank following the approval of an Electronic Money Institution (EMI) licence for Kraken’s UK arm, Payward Services Ltd.
Kraken is well-placed to provide regulated crypto services to European nations and the Commonwealth.
Crypto in the Betting and Gaming Ecosystem
Australia is a target market for Kraken’s institutional custody. Interestingly, the Oceania nation is also a hotbed for crypto, especially in industries such as online betting and gaming.
Australia has a booming iGaming industry with a market size valued at $5.2 billion in 2024. The country accounted for 2.1% of the 2024 global online gambling market revenue.
Several of the top 10 betting apps in Australia now give their customers the option of cryptocurrency transactions for deposits and withdrawals.
This interesting intersection will lead to more crypto adoption, particularly in places where betting is legal and ingrained in the sporting culture.
Elsewhere, another exciting gaming trend has emerged from a surprise fusion of blockchain and entertainment.
Kraken View on Play-to-Earn
Kraken has shown a keen interest in blockchain-based gaming. They are keen on the play-to-earn (P2E) model, where users can earn crypto and valuable non-fungible tokens (NFTs) by playing a game.
Users have their assets on centralised servers when they play traditional titles such as EA Sports FC25 and Call of Duty: Black Ops 6. It belongs to the developer.
However, P2E games allow players to have actual ownership of assets via blockchain-based NFTs. This model has been an interesting development for the gaming ecosystem.
Popular P2E games such as Axie Infinity (AXS), The Sandbox (SAND), Decentraland (MANA), and My Neighbor Alice (ALICE) embed DeFi (decentralised finance) in gameplay.
This allows players to stake their tokens and barter digital assets within the game’s economic framework.
Kraken designed a Learn Centre to play an educational role in the space. They recently published a comprehensive guide on P2E that takes a deep dive into earning by trading NFTs.
They also analyse aspects such as buying digital real estate and other monetisable gaming experiences. Kraken is determined to secure a seat at the table where the future of digital commerce takes shape.
What Does the Future Hold?
With many countries tightening their crypto rules, the Kraken custody expansion comes at the perfect time.
Kraken is open to regulatory scrutiny and mandates compliance, showing why it is a trusted partner for high-net-worth individuals, institutional funds and enterprises looking to integrate crypto.
Ready to seize this opportunity in the financial and digital ecosystem, Kraken believes that crypto is more than a trading instrument. It has real-world use.
Digital assets will likely become mainstream financial instruments over the next few years. Adoption rates are rising dramatically.
The companies that amalgamate security, compliance and innovation will shape the next growth phase. Kraken is backing itself to play a key role in that evolution.