Banking Circle: How the Payment Giant's Bank Was Formed

Source: Payment 201

On the trading platform Kraken, before buying cryptocurrencies, some users will first encounter a bank called Banking Circle.

By choosing the euro deposit channel it offers, eligible users will receive a unique deposit account number under their name. Funds are transferred via SEPA or SEPA Instant, corresponding to Banking Circle's German branch. All users want is an additional available balance in their trading accounts. Behind this, someone needs to connect the bank accounts, local payment systems, and the deposit processes of the platform.

Looking at Banking Circle's public network directory, names like Checkout, Paysafe, Worldpay, as well as Circle, Bridge, BVNK appear. The businesses corresponding to these names vary, yet they utilize the same bank for transactions in certain cryptocurrencies.

The services procured by payment companies, trading platforms, and stablecoin institutions differ, but the needs for accounts, clearing, and fund dispatch overlap. Banking Circle started with payment projects within the Saxo system and gradually integrated these needs into its own business.

To understand its expansion, one must look at how two things drive each other: institutional clients continuously increase the demand for banking services, and banks provide the capabilities built for these demands to more clients.

A line of bank names in the payment information connects to the account, clearing, and institutional network that this company has built over more than a decade.

I. What Saxo Brought is More Than Just a Startup Starting Point

In 2015, when Anders la Cour was interviewed, Saxo Payments still held a payment institution license, and he was already discussing global transaction banking.

Anders originally worked in mergers and acquisitions in the fintech sector. Another co-founder, Laust Bertelsen, was responsible for corporate solutions at Saxo Bank and managed backend operations in Denmark for the new company. The early team also included employees from Saxo, who could leverage the parent bank's foreign exchange capabilities and agency network. The early core system used Oracle Flexcube, and Anders also mentioned preparations for cloud expansion at that time.

This background resonated well with the clients it later chose to serve. Payment institutions, acquirers, wallets, and fintechs already had products and merchants; what they needed next were accounts, foreign exchange, cross-border payments, and a banking backend capable of handling real transactions.

The banking experience brought by the team, combined with Saxo's existing foreign exchange and network resources, allowed it to service such demands from the outset. To gain the trust of institutional clients, someone needed to explain how funds flow, and the system needed to keep clear records and handle anomalies.

In 2018, EQT VIII, EQT Ventures, and other investors acquired Banking Circle along with the founding team. The announcement disclosed that the annualized payment volume at that time was approximately 60 billion euros.

By February 2020, when the company publicly announced the official activation of its banking license and Luxembourg headquarters, the disclosed annualized payment volume had reached 130 billion euros. The founder explicitly mentioned that the bank's identity could expand account services and help payment institutions provide banking functions to their clients.

When it obtained the banking license, it already had a batch of institutional clients and ongoing payment business. The construction of the bank thus had a specific direction: which markets clients would enter next, what accounts they needed, and which payment processes were worth deepening.

Service boundaries also affect customer acquisition. Laust later emphasized the positioning of licensed banks not competing with clients in an interview with Euromoney.

Payment institutions continue to manage their brands, products, and merchant relationships, while the bank provides backend services. This creates a foundation for cooperation, allowing competing payment companies to procure services from the same bank.

II. Nuvei's 146 Bank Relationships Indicate Its Opportunities

In a Nuvei client case, the number of 146 bank relationships was mentioned. At the time of their initial cooperation, Banking Circle was still just a payment institution.

As Nuvei expanded, funds from card organizations and other payment channels needed to be collected, and merchant payments had to be disbursed, requiring the bank to cover more markets and currencies. Banking Circle took on these payment needs and continued to extend services as the business expanded.

Such clients are very attractive: they have their own transaction volumes and will continuously generate new banking demands. However, to continue servicing them, the bank must keep pace with the client's expansion.

As clients enter a new market, they may need to open accounts, connect payment systems, and handle reports and reconciliations. If Banking Circle can integrate these tasks into existing processes, clients will have one less round of bank integration to do; it will also gain an additional capability to sell to other institutions.

This is also the business rationale for its continued investment in clearing connections after obtaining the license.

The company's disclosed development history includes euro clearing, SEPA Instant, and local system access in markets like Denmark. The list of direct participants in CHAPS published by the Bank of England also includes Banking Circle's London branch. In systems with direct participation qualifications, some tasks previously handled by another commercial bank can now be managed in-house. Payment statuses, clearing positions, and anomaly investigations can also be more closely integrated into the same operational processes.

More control brings more responsibility: settlement funds need to be arranged by itself, systems must operate as required, and it must be responsible for insufficient positions, peak processing, and business continuity. Each new market adds to the long-term maintenance workload.

Its path in Australia illustrates how this investment gradually deepens.

Banking Circle first launched local operations through BC Payments Australia and collaborated with Australian Settlements Limited (ASL). By August 2025, the partnership progressed to acquisition. ASL brought local ADI qualifications, payment system connections, the ability to settle directly with the Australian central bank, and experience serving local banks and credit unions.

First leveraging partners to enter the market, then incorporating local capabilities into the system. This allows it to extend in two directions simultaneously: adding Australian services for existing clients and providing cross-border services for local clients.

In the same year, it also announced the addition of Swiss franc SIC access and Liechtenstein IBAN capabilities. The network continues to use both direct clearing and partner banks to organize services according to different markets.

Capital must also follow the construction. The 2024 report disclosed that qualified shareholders committed to adding capital when the total capital adequacy ratio falls below 20% and support the bank in executing business plans and meeting prudential regulatory requirements.

For clients, they are procuring a unified entry point. For the bank, it involves completing licenses, clearing, funding, and operational arrangements for each market. Whether the investment is worthwhile depends on how much ongoing business can be integrated that utilizes these capabilities.

III. Cooperation Must Enter Daily Processes for Customer Relationships to Deepen

Ultimately, the procurement of banking services must translate into how clients operate daily.

The Swiss payment platform Payrexx primarily settles in Swiss francs while also handling euros, pounds, and dollars, receiving funds from different acquirers and other payment methods, and disbursing to merchants.

The case published by both parties shows that it centralized the settlement arrangements for four currencies through Banking Circle, integrating accounts, API payments, and reporting into the processes of receiving, disbursing, and reconciling payments, also preparing for expansion into the European Economic Area. Once services enter these processes, switching banks becomes a project: account information, payment routing, interfaces, reports, and internal operational arrangements may all need adjustments.

This presents ongoing cooperation opportunities for the bank and raises the requirements placed upon it. Clients will compare prices, coverage, payment efficiency, and anomaly handling capabilities. Integration costs can influence migration decisions, while daily performance determines how much business clients are willing to retain.

Marqeta's choice provides another perspective for observation.

In 2025, it acquired TransactPay to enhance its electronic money and project management capabilities. In May of the following year, it announced a partnership with Banking Circle to extend account and fund movement services to an additional 30 European countries, combining virtual accounts and various payment tracks with card products.

After acquiring electronic money capabilities, clients will still procure banking services. Which segments to build in-house will depend on product needs, business scale, and investment; the remaining parts can be undertaken by specialized institutional banks.

Agency Banking deepens this division of labor. Eligible institutions can use their own BIC and IBAN to indirectly access euro and pound payment systems through Banking Circle. Clients retain their external identifiers while utilizing the bank's clearing and settlement arrangements in the backend.

When these institutions simultaneously enter the network, the relationships between clients also begin to hold value. In the public directory of BC-NOW, one can see a list like this:

Payments and Acquiring: Parts of Checkout, Paysafe, Worldpay

Stablecoins and Payment Infrastructure: Circle, Bridge, BVNK, Paxos Issuance Europe Oy

Digital Asset Trading Platforms: Binance, Bitstamp Europe, Bitvavo, Coinbase Ireland, OKCoin Europe

Trading and Liquidity Institutions: B2C2, LMAX Digital, Wintermute

The directory lists specific entities and currencies, with the scope of cooperation limited to disclosed content.

If both the payer and payee hold corresponding accounts at Banking Circle, funds in the same currency can potentially be completed through internal account transfers. BC-NOW provides around-the-clock internal settlements between Banking Circle S.A. accounts. Outside the network, arrangements must still comply with the respective systems and partner banks.

In this list, payment companies, trading platforms, stablecoin institutions, and market makers may inherently have mutual settlement needs. Only by bringing together real trading counterparts, accounts, and available funds can the network's utilization value be enhanced.

Therefore, when evaluating this network, in addition to looking at who is connected, one must also consider what funding activities these institutions bring in, how much available balance they are willing to retain, and the frequency of actual usage.

IV. Once Accounts Are Integrated, the Fund Business Begins to Grow

In 2025, Banking Circle's net payment fees were approximately 58.38 million euros, an increase of about 24.1% from the previous year. Payment business continues to grow, but in the same report, there are already two larger revenue sources: fiduciary business commissions and net interest income.

Net payment fees: 47.03 million euros in 2024, 58.38 million euros in 2025.

Fiduciary business commission income: 71.66 million euros in 2024, 80.80 million euros in 2025.

Net interest income: 80.47 million euros in 2024, 91.29 million euros in 2025.

Net operating income: 220.66 million euros in 2024, 258.75 million euros in 2025.

Annual net profit: 67.33 million euros in 2024, 81.03 million euros in 2025.

Data is based on Banking Circle S.A. bank entity standards, including its branches. Net payment fees and net interest income are calculated as corresponding income minus expenses; net operating income and net profit are summarized items.

The fiduciary business started in 2023. The commission for that year was approximately 9.46 million euros, with a year-end balance of about 1.241 billion euros; in 2024, the commission rose to about 71.66 million euros, and the year-end balance reached approximately 6.075 billion euros.

This business handles clients' needs for fund placement. The bank acts as an agent to conduct fiduciary arrangements and earns commissions; the related funds are listed off-balance sheet. By the end of 2025, the fiduciary business balance was approximately 5.376 billion euros, separately listed from the on-balance sheet client payables of about 4.262 billion euros.

A public product document showcases one type of arrangement: clients can obtain central bank exposure, use a fund structure with bankruptcy isolation arrangements, and comply with regulated aggregation. The document also states that the fund instruction cutoff time is 17:30 Central European Time, with availability resuming at 7:00 the next business day.

The treasury department needs to incorporate these conditions into the payment plan: how much balance must be kept for immediate payment, how much can be aggregated according to rules, and when adjustments need to be made. This allows the bank to continue handling inter-account transfers, fund placements, and cash management.

The client base is also expanding. In 2024, through cooperation with Fundcraft, fund managers can use the bank accounts and payment capabilities via the API of the fund operation platform, with fiduciary accounts also included in this service. In 2025, the bank added fiduciary products for money market funds, with a year-end scale of about 427 million euros; the products in collaboration with BlackRock listed on the official website are aimed at eligible clients.

However, there is a set of changes in the fiduciary business that warrants inquiry: the year-end balance at the end of 2025 decreased by about 11.5% year-on-year, while the annual commission grew by about 12.8%.

The year-end balance is just a point in time, while the commission corresponds to the business throughout the year. To explain this set of changes, information on average balances, product structures, and fee arrangements is also needed. The existing disclosures are insufficient to determine specific reasons, nor can the commission be divided by the year-end balance to serve as the actual annual fee rate. The fiduciary business needs to observe how clients use fund services; looking solely at the year-end scale may overlook operational changes.

On-balance sheet funds correspond to another set of income mechanisms. By the end of 2025, the bank's total assets were approximately 4.933 billion euros, of which cash and balances with central banks, along with public sector bonds measured at fair value included in other comprehensive income, accounted for about 84% in total. These assets generate interest while maintaining liquidity.

Interest income for the year decreased from about 143 million euros to 128 million euros, but net interest income increased from about 80.47 million euros to 91.29 million euros, as interest expenses decreased more rapidly. The cost of client funds and the returns on the asset side also affect this business.

At this point, it can be seen that there is more room for income from account relationships: payments generate fees, fund placements generate fiduciary commissions, and on-balance sheet fund arrangements generate interest income. The case of fund managers also illustrates that these services can independently attract new clients. As for how much profit each business ultimately contributes, segment cost data is still needed for judgment.

V. From Fiat Currency In and Out to Both Ends of Stablecoins

Back to Kraken. The exclusive deposit account number provided by Banking Circle is also used for corresponding withdrawals. This integrates bank services into the funding process for users on the trading platform. Kraken also states that clients who have their corporate accounts and hold euro or dollar accounts with Banking Circle may gain instant euro and dollar payment channels, with specific qualifications needing further confirmation.

Beyond user deposits and withdrawals, institutions also need to allocate fiat currency. Trading platforms and market makers may still have funding needs over the weekend; settlements that can be completed within the bank can serve this part of the activity.

In June 2026, FalconX announced the integration of Banking Circle's banking and payment infrastructure, using BC-NOW to support related fund flows and connecting to the local Australian dollar framework.

Previously established local capabilities through partnerships and the acquisition of ASL now have new users. Digital asset institutions also need to collect money locally, make payments, and arrange fiat currency positions. A local clearing investment can continue to serve another type of client.

On the end of converting fiat to stablecoins, the bank has made another advancement.

In April 2026, the company announced it obtained CASP licensing and integrated the conversion between fiat and USDC, USDG, and EURI into its core platform. Bank accounts, fiat payments, and stablecoin conversions can thus be connected on the same platform.

In September, the expanded cooperation with OSL further combined fiat settlement, cryptocurrency conversion, and liquidity management. In addition to the existing euro business, the announcement added support for Australian dollars, British pounds, Hong Kong dollars, Singapore dollars, and US dollars.

For these types of clients, the bank needs to handle a continuous workflow: receiving one currency, completing the corresponding conversion, and then delivering funds to the next party. The number of supported currencies is just one part; whether the account structure, payment paths, and fund availability times can align will affect the efficiency of the entire business.

On the issuance side, Banking Circle has its own stablecoin and also serves other issuers.

In August 2024, it issued the euro stablecoin EURI, initially offered through Binance, with minting and burning using Fireblocks' technology. The white paper states that the underlying funds are held separately by Banking Circle in a fiduciary capacity, isolated from the bank's own assets. The previously established fiduciary fund arrangements now have specific uses here.

In September 2026, AllUnity launched the US dollar stablecoin USDAU, with Banking Circle providing reserve and transaction banking services. The issuer of USDAU is AllUnity, which handles fiat reserves and related fund transactions.

Issuing its own coins requires establishing distribution and liquidity; serving other issuers can generate business from their reserve and payment needs. Coupled with support for the conversion of other stablecoins, it has entry points for banking business across different stablecoins and issuers.

Its official website has listed digital asset exchanges, institutional trading and OTC teams, Web3 platforms, and stablecoin issuers as service targets, corresponding to needs such as accounts, foreign exchange, intraday fund management, settlement, and reserve banking.

Crypto thus becomes a business line for the continued use of these banking capabilities: the entry point can be deposits and withdrawals, and cooperation can extend to institutional settlements, asset conversions, and issuer services. Public financial reports have not yet separately disclosed the income, balances, or payment volumes contributed by these clients; business coverage and income proportions still need to be viewed separately.

New requirements have also emerged. On-chain transactions, intra-bank fiat transfers, local clearing, availability times for fiduciary funds, and stablecoin redemptions each have different conditions. After intra-bank transfers become faster, how coins and money connect and when external funds become available still rely on specific arrangements.

For the treasury department, it must simultaneously decide the allocation between available fiat, stablecoins, and fiduciary funds. The deeper the all-weather business is developed, the more the bank's liquidity and operational readiness must extend beyond traditional business days.

VI. In the Next Phase, It Must Withstand Daily Use by Clients

In this development path, resources, clients, and investments have been interacting continuously.

Saxo brought the necessary banking experience, foreign exchange, and network for the start; institutional clients brought ongoing business and raised new service demands; the bank reinvested in licenses, local clearing, technology, and fund management, providing new capabilities to more clients. Multiple cases in Crypto have also demonstrated how these capabilities enter new funding scenarios.

However, capabilities that can be resold must also repeatedly pass client scrutiny.

Sufficiently large institutions can build parts of the process themselves, compare prices, and also diversify trading counterparties and operational risks. After Banking Circle connects with a client, it must continue to compete for its business across different markets and products.

The costs of maintaining these services will also continue to occur. By the end of 2025, the number of employees at the bank entity reached 805, with newly capitalized development projects amounting to about 42.05 million euros that year. Clearing systems, interfaces, banking operations, and risk teams all require long-term investment.

Especially after serving institutional clients, the bank's understanding of downstream funds must keep pace. The official website states that virtual IBANs can be allocated by direct clients to downstream users, who do not automatically become direct clients of the bank. The EBA's industry research on vIBAN also points out risks related to downstream user identification and transaction traceability.

The more accounts and institutions there are, the more the bank needs to understand where the funds come from, why they are paid, and ultimately who they are paid to. The digital asset business has also increased the connection between on-chain circulation and fiat payments. Which clients and funding paths can be supported long-term will affect the scale and quality of the business.

In May 2026, the group announced that Kush Saxena, who previously led Getnet and served as an executive at Mastercard, would become the group CEO, while Anders would transition to a senior advisor role, and the handover arrangements for the founding team were announced.

From Saxo's project to this stage, the bank now needs to prove several things simultaneously: there are users in the new markets, existing clients are willing to continue allocating business, and more complex funding services can yield returns sufficient to support the investment.

What Kraken users see is still just a euro deposit. The bank's backend must ensure that account identification, clearing, available balances, and subsequent withdrawals operate as required.

Merchant payments from Nuvei, institutional settlements from FalconX, and funding arrangements from stablecoin issuers must also be completed repeatedly.

Banking Circle has grown along with these ongoing demands. Its next position will depend on how much payment, positions, and funding arrangements clients are still willing to place here daily.

Data as of October 27, 2026. Client cases and network directories reflect their respective disclosure scopes. Financial data is based on Banking Circle S.A. bank entity standards, including its branches, distinguished from group and regulatory consolidated standards; business mechanisms and competitiveness assessments are based on publicly available materials analyzed by Payment201.

Sources

1. Kraken, Banking Circle Funding Provider, page updated on 2026-10-09, retrieved on 2026-10-27. Eligible users in the European Economic Area / UK can use the corresponding deposit method and obtain a dedicated account number in their name; euro SEPA / SEPA Instant corresponds to Banking Circle's German branch. This deposit account is also used for corresponding withdrawals; the page also states that clients holding Kraken corporate accounts and Banking Circle euro or dollar accounts may gain instant EUR / USD channels, with specific qualifications needing confirmation. This does not interpret the dedicated deposit account identifier as establishing a complete retail banking relationship directly between users and the bank.

2. Banking Circle, BC-Now Client Directory, retrieved on 2026-10-27. The directory is listed by specific institutional entities and currencies; this article does not expand the listed entities to the entire group.

3. FinTech Futures, 2015-09-15, The non-bank bank?, original interview with Anders la Cour.

4. Banking Circle / EQT, 2018-07-09, EQT acquires Saxo Payments Banking Circle. €60 billion is the annual payment volume at the time of the announcement.

5. Banking Circle, 2020-02-27, Banking Circle secures banking license. This article uses the external announcement date and does not equate it with the specific date of prior regulatory approval.

6. Euromoney, Banking Circle's CEO Bertelsen on how to rebuild banking infrastructure, original interview with Laust Bertelsen, retrieved on 2026-10-27. Regarding the positioning of licensed banks not competing with customers at that time; this statement is not to be extended to all affiliated companies of the entire group, nor to claim that there will never be adjustments in the future.

7. Banking Circle, Nuvei customer case, PDF pages 1-2. The original text lists 146 banking relationships, indicating that the cooperation began when Banking Circle was still a payment institution, as well as the needs for collection, merchant payments, and market expansion.

8. Banking Circle, Company / Milestones, retrieved on 2026-10-27. This page also indicates that the network provides services through direct clearing and partner banks. The page mixes different periods in its statements about customer numbers and growth rates; this article does not calculate growth based on this.

9. Bank of England, CHAPS Direct Participants, retrieved on 2026-10-27; lists Banking Circle, S.A. (London branch).

10. Banking Circle, 2025-08-04, Completes Acquisition of Australian Settlements Limited. The completion of the acquisition is understood separately from future integration and product rollout.

11. Banking Circle, 2025-06-02, Swiss Interbank Clearing (SIC) Access. SIC access does not equate to all Swiss franc payments being settled instantly around the clock.

12. Banking Circle S.A., Financial Statements 2024, report internal page p.5 fiduciary business launch and growth, p.6 qualified shareholder capital support commitments, p.49 commission details. 20% is the trigger condition for the disclosed shareholder commitments, not the statutory minimum requirement as determined in this article.

13. Banking Circle / Payrexx, Payrexx's Path to Pan-European Settlement, publicly available customer case from 2026, PDF pages 1-2.

14. Marqeta, 2026-05-26, Marqeta Expands Account and Money Movement Offering in Europe. Cross-verified by the client side.

15. Banking Circle, Agency Banking product page.

16. Banking Circle, Payments product page, clarifying that BC-NOW is used for internal settlements between Banking Circle S.A. accounts 24/7. External payments are still subject to the corresponding systems, service arrangements, and cut-off times.

17. Banking Circle S.A., Financial Statements 2025, EY audit report dated 2026-03-31, filed with the UK Companies House on 2026-06-25. The financial items in the main text have been verified against scanned originals. According to report internal page numbers: operational overview p.5; balance sheet pp.17-18; income statement pp.19-20; fiduciary accounting policies p.36; development capitalization p.41; interest and fee details p.49; employees p.50. The filed PDF includes 3 pages of cover, with the physical page numbers in the reader being 3 more than the report's internal page numbers. The bank will prepare consolidated statements separately for 2025; this article references the bank's main statements and does not mix with the group's or Moneyball BidCo's regulatory consolidated criteria.

18. Banking Circle, Secure, accessible and optimized fiduciary solutions, publicly available product information, retrieved on 2026-10-27. Describes central bank risk exposure, bankruptcy isolation arrangements, FlexLiquidity aggregation, as well as the cut-off for funding instructions at 17:30 Central European Time and reavailability at 7:00 the next business day. This article only describes the product information and does not consider all fiduciary assets as the same product; nor does it equate its timing arrangements with the BC-NOW internal settlement service time.

19. Banking Circle / fundcraft, 2024-07-23, cooperation announcement; lists the use of bank accounts, payment, and fiduciary account services through the fundcraft API. It does not recognize all downstream funds under fundcraft as direct clients of Banking Circle, nor does it infer their fiduciary commission contributions based on this.

20. Banking Circle, Money Market Funds product page, lists cooperation with BlackRock, portal access, and qualifications for professional clients/qualified counterparties. The funds are not bank deposits and do not guarantee principal and returns.

21. Banking Circle, 2026-06-10, FalconX Expands Global Fiat Settlement Capabilities.

22. Banking Circle, 2026-04-27, Stablecoin Settlement Services, announced that it obtained CASP license on 2026-04-15, supporting USDC, USDG, EURI.

23. Banking Circle / OSL, 2026-09-15, announcement of the expansion of stablecoin and fiat payment cooperation; original EUR, newly added AUD, GBP, HKD, SGD, USD. The currency range in this cooperation announcement is different from the currencies listed in the BC-NOW participant directory and is not consolidated into a single coverage commitment.

24. Banking Circle, 2024-08-26, EURI issuance announcement. This article does not reference market ranking statements such as "first."

25. EURI Euro Stablecoin White Paper, version 2024-07-16, B.3 / D.9 regarding fiduciary identity, exclusive fiduciary property, and asset isolation arrangements. This is used to explain the issuance structure at that time and does not consider the redemption process time limits in historical versions as the current general SLA.

26. Banking Circle, 2026-09-30, AllUnity USDAU Reserve and Transaction Banking. The issuer of USDAU is AllUnity, and Banking Circle provides related banking services.

27. Banking Circle, Banking Infrastructure for Digital Assets Institutions, retrieved on 2026-10-27. Lists service needs according to digital asset exchanges, stablecoin issuers, Web3 platforms and infrastructure, institutional trading, and OTC teams; this page's directory indicates that only the publicly listed BC-NOW participants appear in the directory. This article does not consider the business capabilities listed by the bank as services used by every client.

28. Banking Circle website regarding downstream vIBAN allocation explanation; EBA, 2024-05-24, virtual IBAN report and regulatory press release; EBA 2025 ML/TF risk report §3.3. This is a discussion of structural risks in the industry and does not indicate that Banking Circle has specific illegal acts recognized by regulators.

29. Banking Circle Group, 2026-05-18, announcement of Kush Saxena's appointment. Distinguishes between the group CEO and the licensed bank management; this article only describes the announced appointment and handover arrangements at that time.