Cryptocurrency exchange Kraken is pursuing a full banking license in Europe, targeting Lithuania as its preferred jurisdiction in a regulatory push that, if successful, would mark a historic first for a crypto-native firm — and raises a pointed question: can an exchange built on digital assets earn the same institutional trust as a traditional bank?
According to a person familiar with the plans, Kraken’s parent company Payward has identified Lithuania as its target jurisdiction to secure the license, though the exact timeline has not been disclosed. Kraken declined to comment on the plans. A spokesman for the Bank of Lithuania said the licensing process of financial market participants is confidential.
The move places Kraken on the same regulatory path as Revolut, the London-headquartered fintech that obtained a specialized European banking license issued by the Bank of Lithuania in 2018. That authorization enabled Revolut to offer full current accounts, consumer lending, and stock trading across the entire European Economic Area — a model Kraken appears intent on replicating. Other fintech firms that currently hold a banking or specialized bank license in Lithuania include Mano Bank, PayRay, European Merchant Bank (EMBank), AB Fjord Bank, and Saldo Bank, according to the source report.
Who’s Affected?
The license pursuit is part of a sweeping global licensing strategy articulated publicly by Payward and Kraken co-CEO Arjun Sethi at Money 2020 Europe. “The plan for the next 10 years is to get all of these licenses, either through buying an existing business, or going de novo in each region and starting from scratch,” Sethi said, according to the source report. That framing — acquisitions versus greenfield licensing — signals that Kraken is willing to absorb established regulated entities as well as navigate lengthy application processes from scratch.
The European banking license bid does not stand alone. In March 2026, Kraken Financial became the first digital asset company to gain access to the U.S. Federal Reserve’s payment infrastructure, granting it the ability to operate on the same settlement rails as traditional financial institutions, according to the source. In May, Payward announced it had secured a Virtual Asset Regulatory Authority (VARA) authorization in the United Arab Emirates. A full EEA banking license would add a third pillar to what is becoming a deliberate, multi-jurisdiction regulatory architecture — one that this publication has noted tracks closely alongside broader industry efforts to secure institutional legitimacy, as seen in JPMorgan’s parallel expansion into tokenized financial products.
Taken together, Kraken’s Federal Reserve access, VARA authorization, and now the European banking license pursuit represent a coherent infrastructure play: the company is not simply seeking permission to operate in new markets, but is systematically acquiring the underlying institutional rails — central bank connectivity, regulated banking status, and regional licensing — that would allow it to compete directly with incumbent financial institutions rather than operating alongside them as a peripheral crypto venue. This tripartite strategy has no direct precedent among crypto-native exchanges and substantially raises the competitive bar for peers still reliant on payment processors and banking intermediaries.
What Comes Next?
A successful Lithuanian banking license would unlock EEA-wide passporting rights under EU single-market rules, enabling Kraken to offer deposit accounts, lending products, and potentially securities services across all 27 EU member states plus Norway, Iceland, and Liechtenstein — without requiring separate national licenses in each. The regulatory and commercial implications are substantial: Kraken would be able to hold customer deposits under a deposit-guarantee framework, access interbank settlement systems, and compete directly with both neobanks and traditional retail lenders. The stakes are heightened by the fact that Kraken is also planning a U.S. initial public offering, meaning any regulatory milestone in Europe will be scrutinized by institutional investors assessing the company’s long-term franchise value.
The Lithuanian route is not without precedent or risk. Revolut’s 2018 license was issued under a specialized banking framework that carries somewhat different capital and governance requirements than a full universal banking charter. It remains unclear whether Kraken is pursuing an equivalent specialized license or a full commercial banking charter; the distinction matters materially for the scope of products it could offer. Meanwhile, the broader political context for crypto regulation in Europe — shaped by the EU’s Markets in Crypto-Assets (MiCA) regulation — is shifting quickly, and the interplay between a banking license and MiCA’s own licensing framework for crypto-asset service providers adds a further layer of regulatory complexity that Kraken’s legal team will need to navigate carefully. Observers of evolving crypto market structure legislation on both sides of the Atlantic will be watching closely to see whether European regulators treat a crypto exchange’s banking application as routine or as a test case.
How Kraken’s Licensing Push Compares to Rival Approaches
| Company | Regulatory Approach | European Banking Status | U.S. Fed Access | Notes |
|---|---|---|---|---|
| Kraken (Payward) | Multi-jurisdiction licensing; de novo and acquisitions | Pursuing (Lithuania target) | Yes (March 2026) | First crypto exchange to seek full EEA banking license |
| Revolut | Specialized banking license via Bank of Lithuania | Yes (since 2018) | No | Fintech precedent Kraken is explicitly following |
| Coinbase | National e-money / crypto licenses; UK FCA authorized | No full banking license | No | UK authorization covers traditional investments alongside crypto |
| Binance | Jurisdiction-by-jurisdiction regulatory settlement | No full banking license | No | Ongoing compliance remediation globally |
The table above draws on publicly available regulatory disclosures and the source report. Coinbase’s recent push into traditional financial products in the UK — securing FCA authorization to offer conventional investments — illustrates that the broader sector is converging on the same thesis as Kraken, even if by a slower and more incremental route. Kraken’s willingness to pursue a full banking charter rather than a patchwork of narrower permissions suggests a higher-risk, higher-reward regulatory bet, one that could either establish it as the definitive institutional-grade crypto exchange or expose it to years of supervisory scrutiny.
How Serious Players Should Respond
For institutional investors and asset managers assessing crypto exchange counterparty risk, Kraken’s banking license pursuit materially changes the due-diligence calculus. A firm that holds a Bank of Lithuania-issued banking license and Federal Reserve payment access is subject to capital adequacy, liquidity coverage, and governance standards that are structurally different from those applied to a crypto-asset service provider operating under MiCA alone. Risk and compliance teams at banks, pension funds, and asset managers should begin scenario-planning now for a competitive landscape in which one or more crypto-native exchanges hold full banking charters — because the products, pricing, and client relationships that follow from that status will not be reversible.
Regulators and central banks across the EEA should treat Kraken’s application — if and when it is formally filed — as an opportunity to clarify how existing banking supervisory frameworks interact with MiCA’s parallel licensing regime. The FCA’s recent signals on technology-driven financial risk suggest that supervisors are already grappling with the governance challenges posed by technology-first financial firms; a crypto exchange seeking banking status will test those frameworks in new ways. Proactive regulatory guidance, rather than reactive case-by-case adjudication, would better serve market stability.
Competing crypto exchanges that lack Kraken’s regulatory runway face a compounding disadvantage: every license Payward secures widens the gap in product permissibility, institutional credibility, and ultimately, customer trust. The window for peers to pursue equivalent licensing strategies is open — but the precedent, once set, favors the first mover. Those exchanges still debating whether to engage regulators on banking terms should recognize that this debate may soon be settled by market structure rather than internal deliberation.
