Kraken rolls out Flexline: Fixed-rate cryptocurrency lending for Pro platform users
Pro-tier users on the cryptocurrency exchange can now access crypto-collateralized loans through the new Flexline service, featuring fixed annual rates between 10% and 25% with loan durations extending up to two years.
Digital asset trading platform Kraken has rolled out Flexline, a new lending service backed by cryptocurrency collateral that enables users of Kraken Pro to obtain loans using their digital currency portfolios as security without liquidating their positions.
The announcement made on Wednesday detailed that these fixed-interest loans feature duration options spanning from two days up to two years, with loan disbursements available in cryptocurrency or stablecoins that users can either trade within the platform or transfer externally, subject to geographic restrictions.
The exchange explains that its standard platform is "geared toward beginners and individual investors, while Kraken Pro is for advanced and institutional traders."
Through the Flexline service, clients have the ability to pledge eligible digital currencies as security and obtain funding nearly instantaneously. The annual percentage rates span from 10% to 25%, as stated on Kraken's official website, although the platform has not revealed precise loan-to-value ratio parameters.
Customer collateral is maintained in separate wallet infrastructure and incorporated into Kraken's Proof of Reserves verification processes, which the platform indicates confirm client holdings on a one-to-one basis. Should maintenance thresholds be violated or loans reach their maturation date without being settled, collateral assets may face liquidation.
According to Kraken, borrowers have the option to settle their loans ahead of schedule utilizing their account balances, though doing so incurs an early settlement penalty. The lending service remains unavailable to residents of Australia, Brazil, Canada, India, New Zealand, Switzerland, the United Arab Emirates, the United Kingdom or the United States.
This product introduction follows just one day after Kraken unveiled tokenized equity perpetual futures contracts on its regulated derivatives trading platform, providing qualified international clients outside the US with round-the-clock leveraged access to prominent US equity indexes, gold commodities and specific corporations including Apple, Nvidia and Tesla.
Crypto-backed lending gains momentum across exchanges, DeFi and traditional finance
The debut of Kraken's lending product arrives during a wider revival in cryptocurrency-collateralized borrowing spanning centralized exchanges, decentralized finance protocols and conventional banking institutions.
Coinbase has recently broadened its collateral-based loan offering to incorporate additional digital currencies, enabling qualified United States clients to secure up to $100,000 in USDC against various tokens including XRP, Dogecoin, Cardano and Litecoin while retaining ownership of their original assets.
Beyond centralized trading platforms, US-based mortgage provider Rate has launched RateFi, an innovative program allowing eligible applicants to leverage authenticated cryptocurrency portfolios to satisfy underwriting criteria without selling their digital holdings, enabling crypto assets to qualify as financial reserves and, under certain circumstances, as income sources.
At the same time, decentralized lending marketplaces continue their expansion. Decentralized finance lending protocols collectively maintain approximately $51.9 billion in total value locked (TVL), with roughly $30.8 billion currently deployed as active loans, based on data from DefiLlama.
Aave dominates nearly half of this market segment with approximately $26.9 billion in TVL, with Morpho protocol securing second position at approximately $5.8 billion.
Institutional investment is similarly penetrating further into this sector. On Feb. 15, Apollo Global Management established a partnership with Morpho to bolster blockchain-powered lending frameworks, with the asset management firm controlling $940 billion announcing potential acquisition of up to 90 million MORPHO tokens as an element of this strategic alliance.