May 24, 2022

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Kraken is working on a marketplace where customers can take out loans backed by their NFTs | Currency News | Financial and Business News

Jesse Powell
Jesse Powell is the chief executive and co-founder of crypto exchange Kraken.

Cryptocurrency exchange Kraken is developing a marketplace where customers can use their non-fungible tokens as collateral for loans, according to a Bloomberg interview with CEO Jesse Powell.

“If you deposit a CryptoPunk on Kraken, we want to be able to reflect the value of that in your account. And if you want to borrow funds against that,” Powell told Bloomberg.

Powell was referring to the CryptoPunk collection of 10,000 pixel-art images that’s considered a groundbreaking project for NFTs, or digital representations of art, music and other items that live on blockchains. 

Kraken’s marketplace would ​​provide custody services and could appeal to people who want to do more with their NFTs beyond collecting, Powell said. He told Insider in an interview earlier this month that Kraken was aiming to open an NFT marketplace as early as February. Kraken currently serves 8.5 million customers, nearly doubling its base over the past year. 

Bloomberg noted that Kraken’s larger rivals Binance and FTX Exchange have started NFT marketplaces and crypto exchange Coinbase has a waiting list of millions of people who want to join its NFT marketplace. OpenSea, meanwhile, is one of the NFT world’s largest marketplaces but it doesn’t offer custody services. 

The cryptocurrency market boomed to a valuation of more than $3 trillion during 2021, in part as the NFT section of the market grew in value largely as digital art has grown in popularity. NFT sales could hit a record $17.7 billion in 2021, according to Cointelegraph Research.

Highlighting such growth, the 225-year-old auction house Christie’s in March sold an NFT art piece for a record-breaking $69 million.