Kraken pushes Krak as a bank alternative with new cashback debit card, salary deposits and high-yield vaults

Kraken has begun a phased rollout of a cashback debit card, salary deposit, and expanded wealth tools for Krak as it looks to turn its new money app into an alternative to traditional bank accounts and neobanks, framing the upgrades as a way for customers to "leave their bank behind and go all-in on crypto" while still accessing everyday payments and savings.

Kraken first launched Krak in June, aiming to compete with Venmo and PayPal by offering free local and international payments. In a statement on Tuesday, the firm claimed the Krak app has since been downloaded more than 450,000 times in over 130 countries and already lets users send over 400 cash and crypto assets to more than 160 countries, with yield opportunities of up to 3.6% on eligible assets.

In a separate press briefing, Kraken executives said the goal now is to move beyond a starter feature set and turn Krak into "the money app you use by default," combining spending, sending, and saving in a single, borderless, multi-asset product.

"Banking still isn't great. What is money is changing… Folks want more… They want access to yield, they want control and transparency, they want fully reserved assets, and they want rewards for how they store and spend value," Kraken Global Head of Consumer Mark Greenberg said.

Challenging legacy banks and neobanks

As part of the new push, Krak will first offer its debit card to users in the UK and EU, with more markets to follow in the coming weeks. The Mastercard-powered Krak Card comes in physical and virtual form, and is designed to spend from multiple balances in real time without FX or monthly fees. For example, a £100 purchase could be split between £80 of cash and £20 of assets such as Bitcoin, Ethereum, or Solana, with instant conversion at checkout based on a user's preset spend order and excluded assets, Kraken said.

On the back end, the card connects to more than 400 crypto and fiat assets supported in the Krak app. "To us, everything is money. You should be able to use whatever assets you hold to pay for everyday goods and services in the digital era we live in," Greenberg said in the statement.

All purchases earn 1% cashback, paid in either local fiat currency or Bitcoin, according to the firm. During the briefing, Kraken UK Managing Director Bivu Das contrasted the offer with bank and crypto-linked cards that pay out in points, illiquid tokens, or tightly limited cash rewards. He said Krak's approach is meant to avoid "unusable" reward structures and tiered limitations, adding that the card provides "real cashback" in spendable currencies without caps or hidden fees. The card will also work globally at ATMs without an ATM fee, with no plans "at this moment" to change that policy, Greenberg noted.

Meanwhile, "Vaults," a new Krak feature, aims to pull customers deeper into onchain yield strategies by routing funds into independently audited DeFi lending protocols. Kraken said Vaults are designed to "transform idle assets into daily earnings" that seek to offer returns of up to 10+% APY, with strategies tailored to individual risk profiles, managed by curators such as Chaos Labs and Sentora.

Users will be able to move funds in and out with a few taps and choose from different risk tiers, with Kraken positioning the product as a way to offer "more competitive rewards than legacy financial institutions can provide."

Furthermore, Krak will soon introduce salary deposits for UK and EU customers, giving them named accounts and IBANs so wages can be paid directly into the app, again with more markets to follow. Das said future automations may allow salary deposits to be immediately converted to a stablecoin with yield, pushed into a Vault, or used to buy Bitcoin automatically.

Das also noted that users will be able to "pay anybody, pay your bills, whether that's domestically or cross-border, and do so instantaneously and seamlessly." Ultimately, its upcoming salary and bank transfer features "may crack a complete modern alternative to a traditional bank account," he said.

In response to concerns over deposit protection, Das stressed that Krak is not a bank and therefore does not offer deposit insurance schemes such as FSCS or FDIC, but said its UK and EU EMI licenses require fiat to be safeguarded one-to-one in segregated accounts at regulated banks. The executives argued that this model is closer to an investment firm than a fractional-reserve bank and noted that Krak does not rehypothecate client funds.

Greenberg added that stablecoins provide an additional layer of transparency, noting that Kraken’s newly launched GBP stablecoin — which should soon be able to offer yield too — and other supported stablecoins are backed one-to-one by underlying financial assets.

"Watch this space for other competitive offerings or assurance based things that we're gonna be offering potentially in the future," Das said. "We're aware that protection is important to customers."

The push comes as Kraken leans on its European regulatory footprint and broader platform to support Krak’s growth. The firm holds a Markets in Crypto-Assets Regulation license authorized by the Central Bank of Ireland, giving it regulated access to offer crypto services across the European Economic Area, and has operated in the UK since 2013 as one of the longest-standing FCA-registered platforms.

Looking ahead, Kraken said it plans to add credit products, more card options, enhanced merchant rewards, simplified onboarding, and broader asset support.

Kraken reaches $20 billion valuation ahead of US IPO

Last Tuesday, Kraken announced it had received a $200 million strategic investment from Citadel Securities, taking total funding over the past two months to $800 million at a $20 billion post-money valuation.

The prior tranche was led by institutional investors, including Jane Street, DRW Venture Capital, HSG, Oppenheimer Alternative Investment Management, and Tribe Capital, along with a significant commitment from Kraken co-CEO Arjun Sethi's family office.

Kraken has recently been scaling its global operations, mostly through acquisitions. Last Wednesday, the crypto exchange then confirmed it had confidentially filed a draft S-1 registration statement with the Securities and Exchange Commission for a proposed initial public offering in the U.S.