Kraken expands beyond crypto with commission-free trading launch

By Arasu Kannagi Basil and Pritam Biswas

(Reuters) -Kraken, one of the world’s largest cryptocurrency exchanges, began a phased national rollout of commission-free trading for over 11,000 U.S.-listed stocks and exchange-traded funds on Monday, marking its latest move to expand across asset classes.

Crypto firms such as Kraken are looking to expand their businesses to traditional financial spaces on the back of U.S. President Donald Trump’s promise of a more industry-friendly regulation.

"Expanding into equities is a natural step for us, and paves the way for the tokenization of assets. The future of trading is borderless, always on and built on crypto rails," Kraken co-CEO Arjun Sethi said.

Kraken users will be able to trade stocks and ETFs in some U.S. states, including New Jersey, Connecticut, Wyoming and Oklahoma, starting Monday.

"Another step taken by Kraken to become a full-service app offering both traditional finance (TradFi) and crypto services," Oppenheimer analyst Owen Lau said.

The San Francisco, California-based company plans on expanding stock trading to more U.S. states, followed by key international markets such as the UK, Europe and Australia.

"We believe more TradFi companies will offer crypto products, and more crypto native companies will offer products for traditional asset classes," Lau said.

In the long run, the new services will also help Kraken drive tokenization of traditional asset classes by leveraging blockchain, he added.

The move, which comes weeks after Kraken struck a $1.5 billion deal for retail futures trading platform NinjaTrader, underscores the increasing intertwining of traditional and digital finance.

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"Crypto isn’t just evolving, it’s becoming the backbone for trading across asset classes, such as equities, commodities and currencies. As demand for 24/7 global access grows, clients want a seamless, all-in-one trading experience," Sethi said.

Financial technology firms and crypto companies are also seeking to become state or national banks to expand their businesses and gain credibility with customers.

Kraken’s multi-asset class ambitions also include plans for payments offerings.

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