Bakkt eyes Hong Kong, UK and EU for international crypto plans

Bakkt CEO Gavin Michael said the company is eyeing Hong Kong, the UK and the EU for international expansion — as the U.S. continues to lack a clear regulatory framework.

“We’ve said quite clearly that whilst we’re committed to the U.S. market, we’re looking for markets where there’s traction and using those markets as a way to fuel growth,” said Michael at the Piper Sandler Global Exchange & FinTech Conference last month, according to a transcript that was made available today.

“We’re particularly focused on Hong Kong, the UK and parts of the EU because we see partners wanting to move into those spaces and we want to be able to support them,” he added.

Michael said that its international plans are supported by its recent acquisition of U.S.-based integrated crypto-trading platform Apex Crypto from Apex Fintech Solutions in April 2023. He said the company expects to use Apex’s existing partnerships with companies like Webull, M1, Public.com and Stash to expand internationally. 

As these companies establish themselves internationally to offer U.S. equities trading, Bakkt can add crypto trading alongside them, he claimed, resulting in a low barrier to entry. That said, Bakkt has already hit some hurdles, having delisted 25 tokens on the platform due to regulatory concerns.

Other markets providing more regulatory clarity

The Bakkt CEO said there’s more traction in crypto markets outside the U.S. since they’re moving faster in terms of regulatory clarity.

“And when you pull back further from the U.S. and you look at what’s happening in other markets, we see them moving slightly ahead of where we are,” he said. He noted that the UK is moving forward with clear crypto regulation, that Hong Kong is allowing trading in certain cryptocurrencies and that the EU has passed its MiCA framework for crypto regulation.

Michael said that he supports the recent regulatory actions in the U.S. but added that the country needs to go further in providing clear regulatory clarity, particularly at the federal level.

This perceived murkiness has had an impact on Bakkt’s ability to work with companies in the U.S., he said. While Bakkt launched with a number of large partnerships — with companies such as Microsoft and Starbucks — Michael said many firms are waiting for regulatory clarity before moving into the space. 

Michael also noted that while its custody service seen a lot of traction, trading is moving at a slower pace.

“When we think about trading, trading is really heavily influenced by regulatory clarity. We’ve seen that in the overseas markets where regulatory clarity has led to a change in consumer sentiment. It’s really helped provide the operating rules for folks who are supporting trading platforms,” he said.

Michael also noted that Bakkt is exploring the use of the Bitcoin Layer 2 Lightning Network for custody and settlement, explaining that it can be used for financial services like cross-border payments.