[DigitalToday reporter Yoonseo Lee] Cryptocurrency exchange Kraken has begun issuing debit cards for users in the United Kingdom and the European Economic Area (EEA).

On July 13 (local time), blockchain media outlet Cryptopolitan reported that users can immediately use cryptocurrencies and cash balances held in their Kraken accounts for card payments.

The card is based on the Mastercard network. For card payments, users can use crypto or fiat balances in their accounts. It is designed to allow payment by converting more than 600 currencies at the time of purchase. It does not charge the exchange's own payment fees or automated teller machine (ATM) fees.

Cashback varies depending on the average size of balances over the past 30 days across Kraken, Kraken Pro and standard Kraken Card balances. For a total balance tier of 200 euros (about 340,000 won), the rate is 0.5 percent; for 1,000 euros (about 1.7 million won), 1 percent; for 10,000 euros (about 17 million won), 1.5 percent; and for 50,000 euros (about 85 million won), 2 percent. New card users receive the top tier for the first 30 days, and after that the tier is adjusted to match balances at month-end. Cashback is paid weekly in a chosen option of bitcoin, euros or pounds.

Users can set the priority of assets used for payments. Tokens not to be used can be excluded from payments, and multiple balances may be used together for a single payment.

Users can apply for the card in the Kraken app, and manage it in a separate money management app called Krak. Krak uses the same login details as the exchange app and handles transaction history, cashback settings and physical card ordering. It can also be used immediately as a virtual card and can be added directly to Apple Pay and Google Pay.

Kamo Asatrian (카모 아사트리안), head of Kraken's global consumer unit and chief AI and data officer at its parent company Payward, said of the background to the card launch, "People should be able to pay without worrying about where their money is." He explained that the card adds payment functionality to Kraken services.

Regulatory frameworks vary by region. In the United Kingdom, the card is issued by Monavate Limited, which holds an e-money licence (FRN 901097), while in the EEA issuance is handled by UAB Monavate, authorised by the Bank of Lithuania.

Kraken said the service is not covered by the UK's Financial Services Compensation Scheme (FSCS). It also noted that taxable transactions may arise in the process of converting cryptocurrencies to fiat currency for payment.

The launch follows Kraken securing compliance in Europe with the European Union's Markets in Crypto-Assets (MiCA) and Markets in Financial Instruments Directive (MiFID) rules as the EU's crypto regulations take effect. Kraken said it plans to expand the card to additional markets including the United States, but a specific timeline has not yet been disclosed. If the service expands to additional markets including the United States, competition in cryptocurrency debit cards is expected to intensify further.

Kraken Card is here. Built with @Mastercard. For you to spend what you trade. Up to 2% cashback in BTC or cash. Zero fees. 600+ currencies. Get your Kraken Card: https://t.co/hfRviecvrI Geo restrictions apply. pic.twitter.com/534R25WanH