Crypto exchange Kraken launches cash back debit card in bid for consumer wallets

Crypto exchange Kraken is launching a cashback U.S. debit card, vying for a place in consumer wallets as crypto evolves from an asset class into infrastructure for mainstream financial products.

The card, called the Krak Card, offers up to 2% cash or bitcoin back, with the rate increasing based on the value of assets a customer holds. Rewards are paid directly as money rather than points.

It also lets customers spend directly from more than 600 currencies and crypto assets, automatically converting whichever balances they choose into dollars at the point of purchase. Users can set the order in which their assets are spent and have the option to split a single purchase across multiple balances.

The move puts Kraken in more direct competition with payments and fintech super apps — including Block's CashApp, PayPal's Venmo, SoFi, Robinhood and Chime. It comes as crypto is increasingly embedded within the broader financial system, and industry players are competing to serve as the distribution layer for a wider range of financial products.  

The opportunity for Kraken goes beyond interchange fees, those generated when customers use its debit card. Kraken offers the card through a partner bank, which issues the card and is subject to U.S. limits on debit card interchange fees. Those limits constrain how much transaction revenue is available to support rewards, which makes a 2% reward difficult to fund from card spending alone.