Kraken's co-CEO has voiced concerns that the current regulatory landscape in the United Kingdom, intended to safeguard users, is instead proving detrimental to them. This sentiment comes as the UK government strives to establish itself as a leading hub for fintech and cryptocurrency innovation, but faces challenges in balancing consumer protection with fostering a thriving digital asset industry.
Bivu Das, Managing Director of Kraken UK, stated that the UK must accelerate regulatory clarity around tokenized assets and stablecoins or risk losing ground to rival financial hubs. Das described the UK's consultative approach as “the right one,” but said regulators should allow firms to test new products such as tokenized securities in the market more quickly.
Kraken's UK operations, which include the neobank challenger app Krak, represent its second-largest market outside the United States. Roughly 20% of UK adults now own crypto, which Das called “pretty significant” given recent restrictions on advertising and financial promotions.
The exchange's criticism highlights the ongoing tension between cryptocurrency innovation and regulatory oversight in major financial hubs. Kraken's position reflects broader industry concerns that slow-moving policies could hamper the UK's ability to compete with more crypto-friendly jurisdictions in attracting blockchain businesses and DeFi projects.
Kraken launched Krak, a neobank-style app that combines trading with payments and banking features. The app will include debit cards for UK and European users, allowing them to receive salaries, make cross-border transfers, and earn stablecoin yields. Das said the goal is to give customers “new ways to interact with crypto beyond traditional trading". The company also revamped its consumer app to make onboarding easier amid increased retail demand.
While tokenized stocks remain unavailable in the UK, Kraken continues to prepare for a future in which blockchain-based financial products are integrated into mainstream banking systems. Kraken's rollout of xStocks support in the EU earlier this year is a product not yet available in the UK. Das said the tokenized assets are already attracting millions in daily net inflows and opening access to previously restricted capital markets, describing them as a stepping stone for investors to something that could be "super interesting".
Das acknowledged the Financial Conduct Authority's openness to dialogue but said the Bank of England has been less open to experimentation, highlighting its proposed cap on how much stablecoin exposure businesses can hold — a move some view as an effective ban.
Kraken is also engaging regularly with UK government departments and political parties to promote education and policy understanding around digital assets. Interest in crypto regulation rose briefly under the previous Conservative government before stalling after the snap election in 2024, with that process having to start again under the new Labour government.
The Financial Conduct Authority, the primary regulator overseeing crypto, has been criticised for its slow pace in creating guidelines for the industry. Colin Payne, head of innovation at the FCA, said, “We are not going to apologise for being cautious,” and reminded that the FCA was one of the regulators that said no to FTX, the crypto exchange that collapsed in 2022 in a flurry of fraud allegations.
