Europe’s ICT market is currently valued at €1.02trillion. However, a released whitepaper emphasizes that the continent’s long-term tech competitiveness relies heavily on scaling AI computing power, establishing cloud infrastructure, embedding open-source standards, and mobilising deeper pools of startup capital.
Authored by GITEX AI EUROPE in partnership with research firm LUE, the whitepaper argues these priorities form a “new industrial compact”. Together, these pillars aim to align Europe’s innovation capacity with its broader economic and energy growth.
Compute capacity and energy integration
While Europe’s data centre capacity is projected to grow by 70 per cent by 2030, demand stemming from AI applications is expected to rise even faster. To keep pace, the region must expand its compute and energy infrastructure in tandem to ensure resilience and sustainability.
Key infrastructure insights from the study include:
Germany alone may need to triple its data centre capacity by the end of the decade.
This expansion in Germany will require up to €60billion in new investment to meet projected industrial and AI workloads.
The EU’s €200billion InvestAI programme is already anchoring this effort by funding five AI gigafactories across Europe.
These facilities will be equipped with 100,000 or more specialised GPUs, with access open to large industrial companies, startups, and research institutes.
Sovereign cloud and open-source foundations
The second frontier identified by the report is cloud autonomy. Currently, about 40 per cent of European enterprises have at least 40 per cent of their applications hosted in the cloud, a figure that is expected to soar to 91 per cent by 2028. Despite this rapid adoption, non-European hyperscalers currently control roughly 70 per cent of the continent’s cloud market.
The paper calls for a shift toward “sovereign-first” cloud architectures that guarantee legal, operational, and data control strictly within European jurisdictions.
Open-source technology is highlighted as a pivotal force in reinforcing this sovereignty. Open standards, such as the Sovereign Cloud Stack (SCS) funded by the German Federal Ministry for Economic Affairs and Climate Action, enable companies to migrate freely across platforms and foster a culture of shared innovation without relying on proprietary vendors.
Backing deep-tech builders
According to the Bertelsmann Foundation, despite Europe’s rich engineering talent, only around 5 per cent of global venture capital flows into the EU tech ecosystem.
To close this critical funding gap, the whitepaper calls for a new ecosystem of growth-stage financing powered by public-private co-investment and strategic industrial funds. Current initiatives building this financial scaffolding include:
Germany’s €1billion KfW DeepTech Future Fund, which backs high-growth innovators.
The Important Project of Common European Interest (IPCEI) on Next-Generation Cloud and Services, which channels €3billion into EU-based data and semiconductor projects.
Rallying global tech partnerships
The findings set the stage for GITEX AI EUROPE 2026, which is scheduled to run from 30 June to 1 July 2026 at Messe Berlin.
The event serves as a massive nexus connecting AI, deep tech, quantum, cyber, and cloud innovators. Following a successful inaugural edition that united 1,400 enterprises and startups from over 100 countries, the 2026 event will reinforce its role as a defining platform for the continent’s intelligent economy and collaborative technological leadership.
Ripple’s prime-brokerage unit announced Monday it closed a $200 million funding agreement with global investment firm Neuberger Berman to expand the margin it offers investors to trade in traditional and digital asset markets.
In its announcement, Ripple also said the funding will help support the ongoing growth of its multi-asset prime brokerage platform, Ripple Prime, citing increasing client demand for its institutional-grade services and margin financing solutions.
The crypto firm said that since it acquired Hidden Road and rebranded it as Ripple Prime in 2025, this platform’s revenue has tripled year over year. Neuberger Berman has approximately $570 billion in total assets under management (AUM).
Ripple acquired prime-brokerage Hidden Road for $1.25 billion, one of the largest deals in the history of the cryptocurrency industry. The company later agreed to buy treasury-management software provider GTreasury for $1 billion.
“Dependable access to financing and balance sheet strength are critical to institutional participants in today’s dynamic markets,” said Noel Kimmel, President of Ripple Prime. “This facility enables us to grow alongside our clients by delivering increased margin capacity, greater responsiveness, and improved capital efficiency.”
Kimmel said that apart from the funding, Neuberger Specialty Finance brings deep expertise in asset-based finance and a strong understanding of Ripple Prime’s services and business model.
“Ripple Prime has built an innovative brokerage platform combining fintech-grade technology and agility with bank-level compliance and operational rigor,” said Peter Sterling, Head of Neuberger Specialty Finance.
Institutional investors are getting increasingly more involved in crypto assets, in part due to the U.S. President Donald Trump’s Administration’s drive for more crypto-friendly rules and regulations.
State Street Corp. announced a digital-asset platform earlier this year, while Standard Chartered Plc has plans to set up a prime brokerage for crypto trading.
Ripple also raised $500 million, giving the firm a $40 billion valuation, with backing from Fortress Investment Group and Citadel Securities. That capital was used to boost Ripple’s expansion into custody, stablecoins and prime-brokerage services.
The launch of Bitget’s “Scan to Pay” feature on May 6, 2026, marks a major milestone in the evolution of stablecoins from speculative assets to practical “everyday money.” By enabling users to scan merchant QR codes and pay directly with USDT, Bitget is plugging decentralized value into the world’s most successful retail payment infrastructure. This is particularly transformative in Southeast Asia and Latin America, where over 2.2 billion people already use QR codes, but high percentages of the population remain “underbanked.” For these users, Bitget Pay provides a way to hold digital dollars and spend them instantly at local merchants, bypassing the “correspondent bank tax” and the delays of traditional fiat conversion.
For Bitget, this move solidifies its transition into a Universal Exchange (UEX)—a model where trading, assets, and daily financial services are unified. By allowing USDT to function as a seamless payment rail that settles in the background, Bitget is removing the “friction of off-ramping” that has historically limited crypto adoption. Merchants receive settlement without exposure to volatility, and users gain a consistent payment experience that works across borders. In a 2026 landscape where digital assets are becoming structural parts of the financial system, Bitget is betting that the exchange of the future is not just a place to trade, but a wallet that powers a morning coffee purchase.
Bitget, the world’s largest Universal Exchange (UEX), has introduced its Scan to Pay feature on Bitget Pay, enabling users to spend USDT directly at offline merchants by scanning QR codes through the Bitget App.
The feature is now live across selected markets across Southeast Asia and Latin America at launch, where QR-based payments are widely adopted but access to traditional banking infrastructure remains uneven. By integrating with existing local payment networks, Scan to Pay allows users to complete transactions without changing merchant systems or relying on bank intermediaries.
The launch comes as crypto adoption continues to expand beyond trading into real-world use cases. Emerging markets across Southeast Asia and Latin America have seen some of the fastest growth in digital asset usage over the past year, driven in part by demand for stable, accessible financial tools. At the same time, billions of adults globally remain underbanked despite widespread access to mobile payment systems, creating a gap between financial access and financial usability that new payment models are beginning to address.
Scan to Pay is designed around this intersection. Users can set a payment PIN, scan a merchant QR code, and complete transactions instantly, with USDT converted and settled in the background. The experience mirrors familiar local payment flows, while removing the need for manual off-ramping, bank transfers, or currency conversion steps.
“QR code payments have a strong real life usage with over 2.2 billion people using it globally. There’s no reason why crypto shouldn’t be a part of it. It naturally fits into how people live, and spend.” said Gracy Chen, CEO of Bitget.
For users in supported markets, the feature enables stablecoins to function as practical spending tools rather than passive holdings. For travelers and cross-border users, it offers a consistent payment experience across regions without reliance on local banking systems. For merchants, integration requires no change in infrastructure, while transactions are settled without exposure to crypto volatility.
The rollout reflects a broader shift in how digital assets are being positioned within financial systems. As stablecoins gain traction as a medium of exchange, their role is expanding from trading pairs to payment rails that can operate alongside existing networks.
Within Bitget’s UEX model, where trading, assets, and financial services are brought into a single environment, Scan to Pay extends crypto from portfolio management into daily life. As financial services converge, the distinction between holding assets and using them continues to narrow, moving digital assets closer to everyday money.
FF NEWS TAKE
Bitget is effectively “leapfrogging” the credit card era in emerging markets. While Western fintechs are still trying to integrate crypto with legacy card networks, Bitget is targeting the mobile-first economies of APAC and LATAM where QR codes are already the dominant currency. The brilliance of the “Scan to Pay” rollout lies in its invisibility; it integrates with existing local payment networks so that merchants don’t have to upgrade their hardware. By positioning itself at the intersection of “financial access” and “financial usability,” Bitget is capturing a high-velocity transaction layer that traditional banks have failed to serve.
However, the “UEX” strategy carries significant regulatory weight. As Bitget integrates direct banking rails in Nigeria and Mexico and expands its tokenized stock offerings, it must navigate the strict compliance standards of the GENIUS Act and the EU’s MiCA framework. The recent $1 billion milestone in tokenized stock volume proves there is a massive appetite for 24/7 financial access. If Gracy Chen and her team can maintain Bitget’s 163% reserve ratio while scaling these real-world payment tools, they will set the standard for how a global exchange can operate like a next-gen digital bank for the world’s 125 million digital asset users.
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure
Data shows the Estimated Leverage Ratio has seen a sharp decline for Ethereum on Binance, a sign that traders have been pulling back on risk.
Ethereum Leverage Ratio Has Dropped To A Value Of 0.57
As pointed out by an analyst in a CryptoQuant Quicktake post, speculative activity in the Binance Ethereum derivatives market has observed a cooldown recently. The indicator of relevance here is the “Estimated Leverage Ratio” (ELR), which tracks the ratio between the ETH Open Interest and Derivatives Exchange Reserve.
The former metric, the Open Interest, measures the total amount of positions related to the cryptocurrency that are currently open on a given centralized derivatives exchange. Meanwhile, the latter is the amount of the asset sitting in wallets connected to that platform. Since the ELR takes the ratio of the two, it essentially tells us about how much leverage investors are opting for against the average position.
When the value of the indicator is high, it means the Open Interest is significant compared to the Exchange Reserve. Such a trend suggests the average trader on the exchange is opting for a high amount of risk. On the other hand, the metric being low implies investors aren’t taking on much leverage on their positions, a potential sign that market interest in speculative activity is low.
Now, here is a chart that shows the trend in the Ethereum ELR for Binance over the last few months:
The value of the metric seems to have plunged over the last few weeks | Source: CryptoQuant
As displayed in the above graph, the Ethereum ELR for Binance surged to a high level back in March. This uptick in leverage usage coincided with a recovery run in the cryptocurrency. The rally failed to sustain, and with it, speculation also noted a cooldown. In April, the market again made a recovery, and while investors took some risks initially, the ELR interestingly ended up following an overall downtrend. This means that this new surge hasn’t been able to attract the more speculative traders to the cryptocurrency.
Today, the ELR is sitting at a value of 0.57, implying that the Open Interest is 57% of the Binance derivatives reserve. For comparison, the metric peaked at 0.76 back in March. While the decline in the indicator does signal that investors have become more risk-averse, it may not entirely be a bad sign for Ethereum. In the past, periods with extreme leverage usage in the derivatives market have often unwound with volatility.
Given that the ELR has calmed down recently, it’s possible that the market could show some stability in the near future. That said, it only remains to be seen how the metric will develop in the coming days.
ETH Price
At the time of writing, Ethereum is trading around $2,330, unchanged from one week ago.
Looks like the price of the coin has been consolidating recently | Source: ETHUSDT on TradingView
Featured image from Dall-E, chart from TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
Solana developer Anza said Monday that Alpenglow, the network’s biggest proposed consensus overhaul to date, is live on a community test cluster, marking a major step toward a potential mainnet rollout.
The update means validator operators can now test software designed to move Solana from its current consensus system, which combines Proof-of-Stake with TowerBFT and Proof-of-History, toward a new architecture intended to dramatically reduce finality times and improve network responsiveness.
“Alpenglow is live on the community test cluster,” Anza wrote on X. “The biggest consensus change in Solana’s history, now running on validator infrastructure ahead of mainnet.”
Today, Solana relies on Proof-of-History, a cryptographic clock that timestamps transactions, alongside TowerBFT, a voting mechanism validators use to agree on the state of the blockchain. While the design has helped Solana achieve high throughput and low fees, some have pointed to outages and network instability during periods of heavy demand.
Alpenglow proposes replacing major portions of that system with a redesigned framework centered around new components. In simple terms, the new model aims to let validators communicate and confirm blocks faster and more efficiently, potentially cutting transaction finality from several seconds to near real-time speeds.
The start of the community test cluster also suggests that validator software can successfully perform what developers are informally calling “Alpenswitch,” transitioning validator nodes from Solana’s existing process to Alpenglow in a live network environment.
The test milestone comes just days after Solana co-founder Anatoly Yakovenko said at Consensus Miami 2026 that Alpenglow could reach mainnet as soon as next quarter if testing continues smoothly.
Read more: Solana’s ‘Alpenglow’ upgrade could arrive next quarter, co-founder Yakovenko says
Immediately after Morgan Stanley announced it was rolling out E*Trade, charging a mere 50 basis points undercutting established rivals Coinbase, Robinhood and Schwab, Bloomberg analyst Eric Balchunas said “crypto exchanges should be scared.”
Others were less blunt, saying the Wall Street giant’s “isn’t entering crypto to complement Coinbase—it’s entering to replace it…”
The battle for cheap crypto trading resembles the trading fee race when spot ETFs launched in 2024, which saw providers begin high, offering 50 basis points before Morgan Stanley undercut them all with a 14 basis point offering.
In the long run, this means that trading crypto will be cheaper, where the clear winners will be retail traders, while crypto exchanges see their margins significantly trimmed, potentially affecting the likes of Coinbase, who recently cited financial issues as a reason for to reduce its workforce by 14%.
When announcing E*Trade, Jed Finn, Morgan Stanley’s head of wealth management, suggested the move was more about dominance than control. “This is much bigger than trading crypto at a cheaper rate.
“In a way, the strategy is disintermediating the disintermediators.” He added: “It’s going to be very competitive in the next couple of years,” explaining the move is aimed at ensuring its 8.6 million clients remain within its banking system instead of resorting to other platforms as the demand for crypto increases.
In his X post last week, Balchunas echoed Finn’s sentiment, framing the Wall Street giant’s move as a “SHOTS FIRED” moment. “Morgan Stanley is rolling out crypto trading on its E*Trade platform for 50bps per trade, undercutting Schwab’s 75bps (who undercut Coinbase).”
He said that based on his knowledge of how Schwab works, it will “likely won’t let this stand. Others will probably undercut too.” He also said that “by the time the dust settles it’ll be pretty dirt cheap to trade crypto everywhere.” Before concluding by saying “this is why (traditional financial) TradFi is no joke and crypto exchanges should be scared.”
However, crypto-native leaders rebuffed the “doom and gloom” narrative as U.S.-centric.
“While we respect Eric Balchunas’s insights on TradFi’s push into crypto, the perspective feels somewhat localized to the U.S. market and oversimplified for quick engagements on X,” said Kevin Lee, chief business officer at Gate, which ranks seventh on Coingecko with a 24 hour volume of nearly $2 billion.
Lee also told CoinDesk that Balchunas’ comments do not “fully capture the mature, global evolution of the crypto industry.”
The Gate CBO explained that the recent moves by the Wall Street giants to cut spot trading fees reflects the ongoing reduction of commissions that is normal to see when competition intensifies.
“This mirrors long-established patterns in equities markets, where fierce competition naturally compresses fees,” Lee said. “Smart platforms moved on long ago from fee-only models to diversified revenue streams including staking, structured products, institutional services, and ecosystem growth.”
Georgii Verbitskii, derivatives trader and founder of TYMIO, a non-custodial decentralized finance (DeFI) protocol, told CoinDesk he believes Morgan Stanley’s move into crypto trading is a good sign.
“This is clearly positive for crypto adoption overall,” Verbitskii said. “Morgan Stanley bringing crypto trading to millions of brokerage users is another sign that digital assets are becoming part of mainstream investment infrastructure, although the 50 bps fee itself is not especially competitive.”
Keneabasi Umoren, a crypto market analyst and Web3 researcher, recently told CoinDesk, he does not believe Wall Street will “kill exchanges, but it will squeeze U.S. spot-trading and custody revenue and push exchanges further into derivatives, DeFi and global markets.”
The launch of cloud-based e-commerce acquiring by The Belize Bank Limited, announced on May 6, 2026, represents a pivotal moment for the Caribbean nation’s financial infrastructure. By consolidating its ATM, POS, and online transactions into a single SmartVista stack, the bank has effectively removed the “fragmentation tax” that has historically hindered local merchants. This matters because Belize is currently navigating a high-stakes transition toward a digital economy, driven by the National Digital Infrastructure Plan unveiled in late 2025. For Belizean businesses, this milestone means they can finally accept Visa, Mastercard, and American Express online with the same institutional-grade fraud protection and settlement speed previously reserved for physical retail.
This expansion is the culmination of a decade-long partnership with BPC, a global leader in payment orchestration. By opting for a SaaS (Software-as-a-Service) model, the bank has bypassed the prohibitive costs of maintaining on-premise legacy hardware, allowing it to scale its merchant services in lockstep with Belize’s booming digital commerce sector. In a region where “de-risking” by global correspondent banks has often stifled growth, The Belize Bank’s ability to take full control of its acquiring infrastructure provides a crucial layer of self-reliance and stability for the country’s financial system.
The Belize Bank Limited is redefining the country’s digital economy with the launch of cloud-based e-commerce acquiring. By expanding its SmartVista-powered capabilities to include secure online transactions, the country’s most enduring full-service bank is removing barriers for Belizean merchants. This milestone marks ten years of payments innovation alongside BPC, reinforcing The Belize Bank’s commitment to driving a modern, secure, and accessible financial future.
Belize’s payments landscape has steadily shifted toward digital over the past decade, supported by national efforts to modernize payments and widen access to formal financial services. As more consumers and merchants move to online channels, The Belize Bank sought to ensure local businesses can accept secure e-commerce payments with the same reliability and control the bank has built across its nationwide acceptance footprint, positioning Belize Bank to remain the top choice for merchants and consumers as Belize’s digital economy scales.
Now, the bank operates a single acquiring stack across ATM, POS and e-commerce, with omnichannel fraud protection covering card-not-present activity. The extension offers the bank’s merchants improved continuity and faster enablement for new payment capabilities. For cardholders, the recent upgrade translates into a smoother online checkout experience, stronger transaction security, and wider acceptance of digital payments as more local merchants expand into e-commerce.
The Belize Bank originally selected BPC SmartVista to migrate from legacy technology and consolidate ATM and POS acquiring under a single modern platform, bringing enhanced payment acceptance, greater control over transaction routing, fees, and scheme connectivity. Leveraging that, and opting for a service model, the bank has now expanded its acquiring business into e-commerce for Visa, Mastercard, American Express acceptance.
“This milestone reflects a decade of trusted delivery and continued investment in the payment services our customers and merchants rely on,” said Monica Daryanani Urbina, Chief Banking Officer, The Belize Bank Limited. “Choosing BPC early in our modernization journey positioned us to take control of our acquiring infrastructure and be one of the driving forces behind Belize country digital transformation. Today’s e-commerce expansion builds on that foundation. It enables us to support Belize’s booming digital economy with secure online acceptance, more scheme coverage, and a platform we can continue to scale.”
Mariflor Alice Guier, Account Manager and New Deals Developer for central Americas, BPC, added: “The Belize Bank Limited has pursued a clear strategy of consolidation and modernization of legacy stack without compromising security or service continuity. We are proud to mark ten years of partnership and to support this latest step into acquiring e-commerce, delivered by BPC as a service. The Bank continues to evaluate opportunities to enhance its payment and merchant services capabilities as part of its broader digital transformation agenda.
FF NEWS TAKE
The Belize Bank is executing a “platform consolidation” masterclass that many larger regional banks would do well to study. By moving to a unified, cloud-native stack, they have transformed e-commerce from a complex “add-on” into a core, scalable utility. The inclusion of omnichannel fraud protection for card-not-present (CNP) transactions is particularly savvy; as more Belizeans shop online via platforms like E-Kyash and DigiWallet, the risk of sophisticated cyber-fraud rises. This “security-first” approach ensures that consumer trust—the most fragile element of a developing digital economy—is protected from day one.
However, the real test for The Belize Bank will be the “last mile” of merchant enablement. While the cloud infrastructure is now live, the success of this initiative depends on how quickly the bank can onboard the thousands of SMEs that still operate primarily in cash. With the Central Bank of Belize pushing for 70% internet penetration and a more formal economy, The Belize Bank’s new E-Commerce API (part of its Open Banking suite) is the exact tool needed to bridge the gap between traditional banking and the “Agentic” commerce future. If BPC and The Belize Bank can maintain this pace of innovation, they may turn Belize into a blueprint for how small, open economies can achieve digital sovereignty through strategic fintech partnerships.
Bitcoin price hovered in a tight range around 82,000 today, extending a week of steady but cautious gains as structural forces, not retail hype, set the tone for the market.
At time of writing, Bitcoin price trades near 82,000, up about 0.65% from Sunday morning but still roughly 22% below its level a year ago and far off the October 2025 peak above 126,000.
Over the past week the coin has held mostly between 80,000 and 82,000. The latest leg higher came late last week after the U.S. Secretary of State Marco Rubio signaled reduced risk of further military escalation with Iran, which eased pressure on the dollar and crude oil and supported risk assets.
Behind the calm price band sits a surge in activity from U.S. spot Bitcoin exchange‑traded funds. U.S. issuers drew about 1.9 billion dollars of net inflows in April, the strongest month since October 2025 and enough to flip year‑to‑date flows positive, while cumulative inflows since the products launched in 2024 now stand near 58 billion dollars.
Those funds hold more than 1.3 million BTC and absorb several hundred coins a day on average, well above fresh mining supply at recent points in April, which tightens liquid supply on exchanges.
Bitcoin ETFs logged nine consecutive days of net inflows through early May, totaling about 2.7 billion dollars and removing an estimated 33,000 to 35,000 BTC from tradable supply. The bulk of that demand has concentrated in BlackRock’s IBIT and Fidelity’s FBTC, turning IBIT in particular into a proxy for institutional sentiment on the asset.
The CLARITY Act is the center of attention
Regulation now sits on equal footing with flows as a driver of price. In Washington, the CLARITY Act, a wide‑ranging market‑structure bill that would define jurisdiction for most digital assets between the SEC and CFTC, is approaching a markup in the Senate Banking Committee, with a floor vote targeted for summer after a compromise over stablecoin yield.
That process builds on last year’s GENIUS Act, which created a full regime for payment stablecoins and set a July 2026 deadline for follow‑on rules.
On Sunday, the American Bankers Association launched a last-minute lobbying campaign against the Digital Asset Market Clarity Act, with ABA CEO Rob Nichols urging bank executives across the country to pressure senators ahead of Thursday’s Senate Banking Committee markup.
In a letter to member banks, Nichols warned that the bill’s stablecoin yield provisions could drive deposits out of traditional banks and into payment stablecoins, which he said would threaten financial stability and economic growth. The effort sparked immediate backlash from crypto advocates and lawmakers supporting the legislation.
Coinbase Chief Legal Officer Paul Grewal said the banking industry had already won concessions during prior White House negotiations, while Senator Bernie Moreno accused banks of trying to kill innovation and pledged to support advancing the bill.
The White House is also continually working on a Strategic Bitcoin Reserve framework that would govern how the government manages seized coins without direct budget outlays, a plan that, if written into statute rather than left as an executive program, would cement state‑level participation on the demand side of the market.
Payward, the parent company of crypto platform Kraken, is raising new capital at a $20 billion valuation, according to two people with knowledge of the matter.
Kraken declined to comment on the raise.
The latest fundraising round comes as the company ramps up spending on takeovers.
Most recently, it bought stablecoin-focused payments firm Reap for $600 million and digital asset derivatives platform Bitnomial for $550 million as it continues to scale up ahead of a planned IPO. Payward was valued at $20 billion in both transactions.
Its biggest deal came in 2025 with the $1.5 billion acquisition of NinjaTrader, a U.S.-based retail futures platform and CFTC-registered futures commission merchant. The acquisition gave Kraken a major foothold in the U.S. derivatives market while expanding its reach to a broad base of active futures traders.
Payward said it confidentially submitted a draft S-1 registration statement to the U.S. Securities and Exchange Commission on November 19, marking the first step toward a potential public listing.
CoinDesk reported in March that the company had paused its IPO plans amid unfavorable market conditions. Sources said the firm remains interested in going public, though likely only once market conditions improve.
At Consensus Miami last week, Payward and Kraken co-CEO Arjun Sethi said the exchange is “80% ready” to go public.
Kraken is a U.S.-based cryptocurrency exchange that lets users buy, sell and trade digital assets, including bitcoin and ether, using either fiat currencies or crypto. The company has expanded beyond spot trading into products such as derivatives, staking and custody, transforming itself into a broader full-service crypto platform.
In recent years, the Wyoming-based firm has adopted a more focused but increasingly strategic acquisition strategy aimed at expanding beyond core crypto trading into derivatives and broader multi-asset market infrastructure.
Deutsche Börse stake
Deutsche Börse (DB1), the owner of the Frankfurt Stock Exchange and Xetra, announced in April that it had taken a $200 million stake in Payward.
The stake, acquired through a secondary share sale, represented roughly 1.5% of the company. The transaction valued Payward at $13.3 billion, down from the roughly $20 billion valuation attached to previous fundraising rounds. Payward did not receive any proceeds from the transaction.
Last November, Kraken said it had raised $800 million in two tranches to support its push into bringing traditional financial products onchain. The round included backing from investors such as Jane Street, DRW Venture Capital and Tribe Capital, while Citadel Securities later agreed to a separate $200 million strategic investment at a $20 billion valuation.
Read more: Kraken parent goes for the OCC charter in bid to become a federal crypto bank
Circle’s (CRCL) upcoming Arc blockchain and its $222 million token presale are raising a broader question for crypto investors: should Circle still be valued mainly as a stablecoin issuer, or as an infrastructure company building the rails for digital finance?
Alongside its quarterly earnings this week, the company announced a major fundraising round for Arc ahead of a planned summer launch, valuing the network at roughly $3 billion backed by investors including a16z crypto, Apollo, BlackRock and ARK Invest.
While earnings results were mixed, the news resonated well with investors, as Circle shares surged more than 15% on Monday, suggesting the launch addresses a critical compliance gap for Wall Street.
“We have built what we believe will be one of the most institutionally-ready networks in the world,” Allaire explained during the earnings call, describing Arc as a system designed to be operated by financial institutions with the “trust required for global economic infrastructure.”
Circle’s share performance on Monday (TradingView)
While this move was cheered by the market and some analysts, including Clear Street’s Owen Lau, who called Arc a “second growth engine” for the USDC issuer, there are still questions about the valuation of Circle’s shares versus Arc’s token, as well as rising competition.
The move also comes as Congress advances stablecoin legislation that could eventually allow banks, fintechs and payment firms to issue their own digital dollars. That prospect has led some investors to question whether stablecoins themselves may become commoditized over time.
What is Arc?
The Arc chain, in test mode since October with plans to go live this summer, is Circle’s attempt to expand its stablecoin business into a broader infrastructure layer.
During the company’s Monday earnings call, CEO Jeremy Allaire pitched Arc as an “economic operating system” designed for payments firms, asset issuers and capital markets.
“We built the highways for USDC,” Allaire said on the earnings call. “Now we’re opening them to other stablecoin and real-world asset issuers.”
The idea, he said, is to make stablecoins and tokenized assets easier to move, while keeping the level of control, compliance and reliability that large financial players expect. The chain is also being built to be ready for AI agents gaining ground in finance, he added.
Allaire’s comments are signs of where the stablecoin industry is heading. The industry’s market cap is at an all-time high, rising above $320 billion. Almost every crypto or traditional firm is either building a stablecoin or rails to service the industry, touting a more efficient, less expensive alternative to legacy systems. A16z, lead investor in Arc’s fundraising, perhaps put it aptly when it said that stablecoins are becoming “one of the most important tools for global finance.”
However, the VC firm noted that the underlying blockchain infrastructure remains fragmented and is largely optimized for crypto-native users rather than banks and corporations. According to a16z, this is where Arc comes in, by aiming to bridge that gap, offering fast settlement, configurable privacy and known validators, features that align more closely with institutional requirements, the firm said.
“As the world’s finance moves onchain, we believe that a handful of blockchain networks will together emerge as the new backbone of the financial system,” a16z partners Ali Yahya and Noah Levine wrote. “Arc is in a strong position to become one of them,” they added.
Circle shares vs Arc token
However, given Arc’s token presale, questions remain about how Arc affects Circle’s valuation in the long term: Why should one buy the shares if they can now buy the token?
To Clear Street’s Lau, they are “two very different concepts.”
He described Arc as the infrastructure layer while USDC operates as an application running on top of it. “You have one more tunnel for your apps to run on. It just means that you have more channel, more opportunity to expand your USDC down the road,” Lau told CoinDesk in an interview.
Lau compared Arc to Ethereum or Solana — layer-1 blockchains that support applications, payments and tokenized assets. In a note earlier on Monday, he argued the network could reinforce USDC adoption, particularly as Circle pushes into AI-driven payments, tokenized finance and commercial settlement systems.
Still, Lau acknowledged Arc remains highly speculative, at least for now.
“It depends on the network activity,” he said. “We still don’t know what apps will actually run on Arc.” For now, he views Arc as “option value” rather than a tangible contributor to Circle’s business.
That caution is shared by Compass Point analyst Ed Engel, who warned investors against assigning too much value to the project before meaningful usage emerges.
“We would prefer to wait for Arc to generate meaningful transaction activity before ascribing value to ARC tokens,” Engel wrote in a research note on Monday. He added that crypto venture firms have a long history of backing blockchain projects at elevated valuations, only for token prices to later decline after launch.
The economics behind Arc remains another open question.
Circle has said fees on the network can be denominated in stablecoins while still accruing value to the ARC token through validator rewards and token burns. Analysts say the structure resembles Ethereum’s model, in which network activity drives demand for the underlying token.
Lau said the $3 billion valuation attached to the presale appears credible given the caliber of the institutional investors involved. “I don’t think that’s crazy,” he said. For now, Arc may matter less for what it generates today than what it signals about Circle’s future ambitions.
‘Significant competition’
The disagreement on what to buy: Token or the share, highlights a central debate now emerging around Circle and the stablecoin industry: whether owning blockchain infrastructure becomes more important as digital dollar issuance itself becomes more competitive.
On one hand, with the launch of Arc, incumbent networks would face increased competition, according to digital asset investment bank FRNT. “Incumbent networks will face significant competition as solutions such as Arc increase in maturity,” the firm wrote in a note.
On the other hand, the industry is dominated by mostly Tether’s USDT and Circle’s USDC, and other stablecoins such as PayPal aren’t gaining market share, according to Clear Street’s Lau. But now, Circle adding Arc creates new competitive tensions, he added.
By launching its own blockchain, Circle is no longer just a customer of crypto infrastructure providers like Ethereum and Solana. Lau said Arc now competes directly with those networks and potentially with Coinbase’s Base blockchain as well.
While there are questions about valuation and the longer-term competitive impact, launching Arc fits a pattern in which crypto developments have increasingly shifted focus to large financial institutions and Wall Street, rather than retail users.
Tempo, incubated by payments giant Stripe and investment firm Paradigm, raised $500 million at a $5 billion valuation in October to launch a payments-focused blockchain. Digital Asset, developer of the Canton Network, has attracted backing from Goldman Sachs, DRW, Citadel Securities, BNY and Nasdaq, and is reportedly raising another $300 million at a $2 billion valuation.
Arc’s fundraising is another example that big-money investors bet that large financial firms increasingly want blockchain infrastructure designed around how institutions actually move money — cross-border payments, treasury management, FX and tokenized assets — rather than the open, retail-first systems crypto started with. And Circle is betting on the trend by going all-in on Arc.
