Cryptocurrency exchange Kraken is launching its own crypto debit card in collaboration with Mastercard. The card will allow Kraken customers in the UK and Europe to spend their crypto assets at more than 150 million merchants worldwide.
This launch also marks another milestone in the expansion of the recently introduced Kraken Pay platform, which offers instant, borderless payments in more than 300 cryptocurrencies and fiat currencies. Additionally, Kraken is reportedly developing its own stablecoin in response to the EU’s Markets in Crypto-Assets (MiCA) regulation, which came into effect in January.
Rather than converting digital assets into fiat currency before making a purchase, Kraken users will be able to pay directly with their crypto holdings at checkout, just as they would with a traditional bank card. To build anticipation, Kraken is offering users the opportunity to join a waitlist for the new debit card, set to roll out in the coming weeks.
Failing to Gain Traction
Crypto debit cards have been launched in the past, but none have gained significant traction with the wider public. These cards have typically been issued by crypto entities such as Coinbase and Crypto.com. Mastercard has previously partnered with some of these organizations for earlier crypto debit card offerings, including its collaboration with MetaMask last year.
The biggest concern surrounding these cards is whether crypto holders will be willing to spend their digital assets on everyday purchases.
“It’s been a tough one to crack,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “A debit card, just like with other remittances, makes more sense when you use something that’s less volatile, like a stablecoin. Accounts debited are great when you have crypto that has increased in value, but once the value of those tokens decreases they don’t want to use the debit card. Time will tell if they’ve cracked it, but I think they need to leverage something less volatile.”
Gateway to Kraken Pay
Kraken’s effort appears to be less focused on catering to the needs of crypto-spending consumers and more on expanding the appeal and functionality of its Kraken Pay service. Introduced in January, Kraken Pay allows users to send over 300 fiat and digital assets to anyone worldwide for free.
The service’s Kraktag feature enables users to send funds through short text messages, similar to peer-to-peer services like Venmo and Zelle. In addition to supporting crypto, Kraktag enables cross-border asset transfers. According to Kraken, Kraktag has attracted more than 200,000 users within its first 90 days of operation.
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