The parent company of cryptocurrency exchange Kraken, Payward, is set to acquire Saldo Bank, a Lithuania-based lender regulated under European Union rules, marking a significant step by a digital asset firm into traditional banking. The Wyoming-headquartered company aims to expand its financial services offerings to include lending, card issuance, and other banking products, blending digital assets with conventional financial systems.

Founded in 2011, Payward operates Kraken, one of the largest crypto exchanges globally. The acquisition would make Payward the first digital asset company to own a fully licensed European bank. Saldo Bank, licensed to operate in Lithuania since 2021, provides consumer and business loans, term deposits, and serves customers across Germany, Sweden, Finland, and the Netherlands. The financial terms of the deal were not disclosed, and the transaction is subject to regulatory approval, with completion expected in 2027.

Arjun Sethi, co-chief executive of Payward, explained the rationale behind the acquisition as a response to customer demand for integrated financial services. He emphasized the company’s goal to unify traditional cash, cryptocurrencies, tokenized stocks, and credit under a single system, allowing clients to borrow and lend against their holdings without the need to sell assets. This integration seeks to simplify financial management and create new opportunities for clients to generate returns on their investments.

Payward’s move mirrors broader trends in the financial industry, where crypto and digital asset companies increasingly seek to broaden their service offerings and compete directly with traditional banks. In the United States, similar efforts include firms like Coinbase and Ripple securing conditional approval for national trust bank charters from the Office of the Comptroller of the Currency (OCC). These charters enable them to hold customer assets and provide transaction services but prohibit accepting deposits, distinguishing them from full banking licenses.

However, the expansion of crypto companies into banking has drawn criticism and legal challenges from established financial institutions and community banks. Opponents argue that crypto firms benefit from lighter regulatory standards than traditional banks, potentially introducing risks to the financial system and creating an uneven competitive landscape. The Independent Community Bankers of America recently filed a lawsuit against the OCC, contending that allowing crypto entities to offer banking-like services without following the same regulatory requirements undermines the community banking sector.

Payward maintains that its banking operations will comply with existing laws and regulatory frameworks. Sethi described the company’s evolution as becoming “new versions of banks” that operate within the same jurisdictions and rules as traditional lenders. Over recent years, Payward has incrementally expanded its regulated footprint, securing electronic money institution licenses in Ireland and authorization from the UK’s Financial Conduct Authority. In March, it became the first crypto firm to gain direct access to the US Federal Reserve’s payment infrastructure.

The acquisition of Saldo Bank represents a strategic milestone in Payward’s ambition to build a global banking presence alongside its digital asset business, leveraging existing licenses while entering new markets.