US crypto exchange Kraken is working on a new functionality which would enable its users to borrow funds against their non-fungible tokens (NFTs), according to the company’s 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, explaining the exchange was developing a system that would determine the liquidation value of users’ NFTs.
The exchange’s forthcoming NFT marketplace will also provide custodial services to its users.
The latest development comes as a number of crypto exchanges are intensifying their efforts to accommodate more business from NFT owners and to integrate new NFT-oriented features into their platforms.
Earlier this year, Powell said in an interview that the San Francisco-based company has “seen a tremendous amount of activity” around NFTs related to various metaverses.
“We think this is going to get a bigger and bigger thing, and we want to be ahead of that,” the chief executive said. “We’re working on an NFT platform right now to give investors exposure to the burgeoning NFT market.”
At the same time, rival US crypto exchange Coinbase has been developing its own NFT platform, with 1m people registering for participation in the marketplace as of October 14, some 24 hours after the company launched a waitlist for those interested in a peer-to-peer marketplace enabling users to mint, buy, showcase , and discover such tokens.
By initiating their own marketplaces, crypto exchanges hope to capture a share of the lucrative market and compete against established NFT players such as the OpenSea marketplace, which says it has more than 600,000 users and provides access to more than 80m NFTs. The marketplace said that, to date, it has accommodated a sales volume of more than USD 10bn.
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