TLDR
- Kraken introduced Flexline, offering fixed-rate crypto-backed loans to Kraken Pro users with annual rates between 10% and 25%
- Borrowers can select terms spanning two days to two years, receiving payouts in cryptocurrency or stablecoins
- Coinbase enhanced its crypto loan offering, allowing US customers to borrow as much as $100,000 in USDC using collateral such as XRP and Dogecoin
- Decentralized finance lending platforms currently manage $51.9 billion in total value locked, with active loans totaling $30.8 billion
- Apollo Global Management formed a partnership with Morpho in February to back blockchain-based lending systems
Kraken has unveiled Flexline, a lending service designed for users on its Pro trading platform. The offering enables traders to access liquidity by using their crypto holdings as collateral while maintaining ownership of their assets.
Borrowers can secure loans with fixed annual rates ranging from 10% to 25%. Repayment periods vary from two days to as long as two years.
The platform disburses borrowed funds in cryptocurrency or stablecoins. Users may trade these funds within the platform or transfer them externally, subject to regional restrictions.
Kraken Pro serves as the exchange’s trading environment for sophisticated and institutional clients. The standard Kraken platform caters to retail investors and those new to cryptocurrency trading.
Collateral deposited by loan recipients remains in segregated storage wallets. The exchange incorporates this collateral into its Proof of Reserves verifications, confirming client assets maintain full backing.
Should a borrower fall below maintenance thresholds or allow a loan to lapse without settlement, the exchange retains authority to liquidate the pledged collateral. Early loan settlement remains possible through account balances, though early repayment carries an additional fee.
The exchange has chosen to keep specific loan-to-value ratios confidential for this product. According to Kraken, approval occurs nearly instantaneously once a user deposits eligible cryptocurrency as collateral.
Flexline remains unavailable to residents of the US, UK, Canada, Australia, Switzerland, UAE, Brazil, India, and New Zealand.
Coinbase Also Expands Crypto Lending
The Flexline debut arrives alongside Coinbase broadening its collateralized loan service. Qualified US customers can now access loans up to $100,000 in USDC by pledging assets like XRP, Dogecoin, Cardano, and Litecoin.
US mortgage provider Rate introduced RateFi, a program enabling qualified borrowers to leverage verified cryptocurrency holdings to satisfy underwriting criteria. The program permits digital assets to qualify as reserves and sometimes income, all while avoiding forced liquidation.
DeFi Lending Continues to Grow
Decentralized lending platforms currently maintain approximately $51.9 billion in total value locked, based on DefiLlama data. Active borrowing across these platforms stands at roughly $30.8 billion.
Aave commands the largest share of the sector with nearly $26.9 billion in TVL. Morpho protocol holds the second position with approximately $5.8 billion.
Apollo Global Management, overseeing $940 billion in assets, established a partnership with Morpho on February 15 to strengthen blockchain-based lending infrastructure. The agreement includes provisions for Apollo to potentially acquire up to 90 million MORPHO tokens.
The Flexline rollout follows Kraken’s recent introduction of tokenized equity perpetual futures on its regulated derivatives platform. This product provides qualified non-US customers with around-the-clock leveraged access to US stock indexes, gold, and prominent companies like Apple, Nvidia, and Tesla.
