Kraken parent Payward buys Saldo Bank: the first crypto firm with a bank of its own in the EU

Payward, the parent company of the crypto exchange Kraken, agreed on October 14, 2026 to buy the Lithuanian Saldo Bank. According to a report in the Financial Times, that would make Payward the first crypto firm to take over a bank in Europe. The purchase price was not disclosed, completion is planned for 2027, and the supervisory authorities still have to approve the deal. This piece separates what Payward and the reporting establish from what stays open until approval, and says what a customer in Germany can already draw from it today.

Payward takes over the Lithuanian Saldo Bank

What is being bought is not the bank directly but Saldo Finance Oy, the Finnish holding company above Saldo Bank UAB, which is based in Lithuania. That structure is standard in bank takeovers: the acquirer comes in above the regulated entity, the bank's licence remains untouched, and the supervisor examines the new owner in what is known as a qualifying holding procedure.

On the size of the bank, CoinDesk cites the data service The Banks with total assets of 163.9 million euros at the end of 2025, up 22.7 percent on the year before. The headline of the same report carries a diverging figure of 190 million dollars, the body text 180 million dollars. What holds is therefore a range, not an exact number: by total assets Saldo Bank is a small institution somewhere between 160 and 190 million. For comparison: that is less than a thousandth of the balance sheet of a large German bank.

Arjun Sethi, co-chief executive of Payward, explains the purchase in the same report by saying that a regulated EU bank is the building block that lets the company serve European customers the way a primary bank should. The sentence is reported in English; the wording above follows the report rather than quoting it verbatim.

What Saldo Bank is and where it has customers today

Saldo Bank is a digital bank licensed in Lithuania. According to the available reporting, the institution serves customers in Lithuania, Finland, Sweden and Germany and holds a passport for the Netherlands. Its business consists of deposits, consumer and corporate lending and payment services.

The reference to Germany is the most interesting part of the news for readers here, and at the same time the easiest to misread. In the EU single market, a bank having customers in Germany does not mean it holds a German licence. The bank works through the EU passport: authorisation in one member state permits business in all the others without a second permission from BaFin. Responsibility for ongoing supervision stays with the authority in the home country, in this case Lithuania.

That responsibility sounds like a formality and is not. It determines which protection scheme steps in if things go wrong and whom a customer turns to.

An e-money licence and a banking licence are two different permissions

To understand why Payward is buying a bank at all, it is worth looking at the permission the company holds so far. Payward is authorised in Ireland as an e-money institution. An e-money institution may take in client funds, hold them and settle payments. Two things it expressly may not do: lend out those client funds and pay interest on balances.

A credit institution, a full bank in everyday language, may do both. It takes in deposits, lends that money on and shares the proceeds with depositors through interest. That distinction is the economic core of the takeover: Payward says it has already issued more than two billion dollars in loans, but in Europe it was never allowed to do so out of its own customers' balances.

The second difference concerns how the funds are protected, and for investors it is the more important one. The next section covers it.

Deposit protection is the real difference for your euros

At a licensed bank in the EU, deposits are protected by law. The EU deposit guarantee directive requires cover of 100,000 euros per customer and institution; the European Central Bank explains the procedure and the limit. If the bank fails, the national protection scheme pays out without the customer having to file a claim.

At an e-money institution this system does not apply. What applies instead is the duty of segregation: the institution must keep client funds separate from its own assets, as a rule in trust accounts at a full bank. In insolvency the funds are beyond the reach of creditors, but repayment runs through the insolvency proceedings and not through automatic compensation. The customer has to come forward there and watch the deadlines.

For investors that means both models protect the money, but they protect it at different speeds and with different effort. Anyone who wants to know which model covers their own balance will find it in the terms of use and the legal notice of the respective company, not in a price chart. BaFin sets out the basics for the German market.

One detail that gets lost in most reports: because Saldo Bank is licensed in Lithuania, the Lithuanian protection scheme would be responsible in an emergency, not the German one. The cover is the same across the EU, the paying fund is not. With a regulated crypto exchange it is therefore always worth checking which company in which country holds the funds.

What Payward Banking plans to offer after completion

Payward has announced four building blocks for the period after completion: interest-bearing deposits, loans to consumers and small businesses, card issuing and euro payments. All four are subject to further approvals, and all four are things a full bank may do and a payment service provider may not.

Card issuing is the block with the most immediate effect in daily life. A bank that issues cards itself no longer depends on a partner sitting between it and the card network. That shortens the chain of parties involved and with it, as a rule, the costs. How far that carries depends on which card network the bank connects to.

On interest, restraint is in order. That a bank may pay interest says nothing about whether it does and at what level. Payward has not named a rate so far, and an institution with total assets in the hundreds of millions has little room to win customers on price.

Kraken in Germany runs through an Irish company today

For German customers, which company does what is the practical part of the story. Kraken says it has served customers in Germany since August 1, 2025 through the Irish Payward Europe Solutions Limited, which received authorisation from the Irish central bank as a crypto-asset service provider under the EU regulation MiCA. The details are on Kraken's information page for customers in Germany.

The MiCA authorisation governs the crypto business: trading, custody of crypto assets, execution of orders. No banking licence comes with it. The euro balance on a Kraken account does not fall under MiCA; what applies there is the permission of the company holding the money.

That the parent is buying a bank changes nothing about this allocation for now. Whether and when euro balances of German Kraken customers will sit with Saldo Bank instead of the current company, Payward has not said. Anyone reading the opposite is reading a guess.

Approval is pending, completion is planned for 2027

Between the signing of a purchase agreement and completion, banks face a procedure that cannot be shortened. The supervisor examines the acquirer for fitness, financial soundness and the origin of the funds. It also examines whether the bank still has a viable business model after the takeover. Only then does the change of ownership take effect.

Payward names 2027 as the period for completion. Counted from mid-October 2026, that is a horizon of at least a good two months and at most a good two years. The range is wide and it is not unusual: qualifying holding procedures in the EU take between a few months and more than a year depending on complexity.

Our assessment: the timetable is the least certain part of the news

From the newsroom's point of view the strategic step is plausibly evidenced, the timing of its effect is not. Three verifiable points speak for the plausibility: Payward says it has already issued more than two billion dollars in loans and therefore runs a lending business that lacks a funding base in Europe. The company holds a limited-purpose Fed account in the United States and has applied for, but not yet received, a national trust bank charter. And the Irish e-money permission legally rules out interest and lending out of client funds. Buying a bank is the shortest route to closing that gap.

Against it stands the scale. A bank with total assets between 160 and 190 million is suitable as a licence holder, but not initially as a platform for millions of European customer accounts. Between acquiring the permission and an offer that German customers see in their account lies a build-out for which Payward has so far named neither figures nor dates. Anyone concluding from this news that interest on euro balances at Kraken is coming shortly is mistaking the first step for the result. This assessment weighs the situation and is not a recommendation to buy or sell.

What stays open until completion

Four questions the reporting so far does not answer. First the purchase price, which was not published. Second, whether euro balances of existing Kraken customers are meant to move to the bank at all, or whether the bank becomes a separate offer alongside the exchange. Third, which interest rates are planned. Fourth, whether the Lithuanian supervisor agrees and under what conditions.

Until those points are settled, nothing changes in the legal position of a German Kraken account. The crypto business continues to run through the Irish MiCA authorisation, the euro balance through the existing company, and the statutory deposit protection of 100,000 euros still does not apply to it. This reading reflects the state of the reporting on October 16, 2026; if Payward changes the details, the assessment changes with them.

There is one connection that reaches beyond Kraken. EU supervisors are currently reordering the crypto market in quick succession, most recently with the classification of USDC as a significant e-money token. That a large trading venue buys a banking licence in the same phase, rather than waiting for one of its own, says something about how long such procedures take.

Kraken banking licence: nothing changes in your account before 2027

Nothing in this news calls for action in your portfolio right now. Three things are still worth a look:

1. Establish which company holds your euro balance. The detail is in the terms of use of your exchange, not in the press release. Which venues work under which authorisation is shown in the crypto exchange comparison.
2. Separate trading balance from holdings. A balance at a trading venue is a claim against a company, not a key of your own. For amounts that sit for longer, self-custody is the alternative; the devices differ in the hardware wallet comparison.
3. Calculate interest after tax from the start. Should interest-bearing euro deposits arrive, the income counts as investment income and is subject to withholding tax, unlike price gains on crypto assets after a one-year holding period. A tax tool keeps the overview.

(As of October 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)