Cryptocurrency exchange Kraken has launched a new fixed-rate, crypto-backed loan product called Flexline, exclusively for its Kraken Pro users. The service allows clients to borrow against their digital asset holdings without being forced to sell them, providing liquidity while maintaining market exposure.
The loans feature fixed annual percentage rates (APRs) ranging from 10% to 25% and offer flexible terms from as short as two days up to two years. Loan proceeds can be issued in cryptocurrency or stablecoins and, depending on regional eligibility, can be traded on the platform or withdrawn. Kraken charges a 0.5% origination fee and assesses interest every four hours.
Users can post supported cryptocurrencies as collateral, with funds becoming available almost instantly. The loan-to-value (LTV) ratio governs borrowing capacity and liquidation risk. Collateral is held in segregated wallets and is included in Kraken's Proof of Reserves attestations, which the exchange states verifies client assets on a 1:1 basis. If maintenance requirements are breached or a loan reaches maturity without repayment, the collateral may be liquidated.
While loans can be repaid early using an account balance, doing so may incur an early repayment fee. The product is notably unavailable in several major jurisdictions, including the United States, the United Kingdom, Canada, Australia, Brazil, India, New Zealand, Switzerland, and the United Arab Emirates.
Kraken's launch is part of a broader resurgence in crypto-collateralized lending. Competitor Coinbase recently expanded its own loan product to support assets like XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC), allowing eligible US users to borrow up to $100,000. Meanwhile, decentralized finance (DeFi) lending protocols hold approximately $51.9 billion in total value locked (TVL), with Aave dominating nearly half of that market.
The move also follows closely on Kraken's announcement of tokenized equity perpetual futures on its regulated derivatives platform, highlighting the exchange's push to expand its advanced financial product offerings for institutional and pro traders.
