TLDR
- Kraken introduced Flexline, offering fixed-rate loans backed by crypto for Kraken Pro customers with rates between 10%–25%
- Borrowing terms span from 48 hours to 24 months, with payouts in digital currencies or stablecoins
- Coinbase enhanced its lending service, allowing American customers to access up to $100,000 in USDC using collateral such as XRP and Dogecoin
- Decentralized finance lending platforms collectively manage $51.9 billion in TVL, with $30.8 billion currently loaned out
- Apollo Global Management formed a strategic alliance with Morpho in February to bolster blockchain lending systems
Kraken has introduced a lending service named Flexline specifically designed for its Pro platform customers. This offering enables traders to access liquidity by using their digital assets as collateral while maintaining ownership.
The product features fixed interest rates ranging from 10% to 25% annually. Borrowers can select loan durations anywhere from 48 hours to a full two-year period.
Borrowers receive their funds in either cryptocurrency or stablecoin form. These disbursed assets can be utilized for trading on the exchange or transferred externally, subject to regional regulations.
Kraken Pro serves as the company’s trading environment designed for sophisticated traders and institutional participants. The standard Kraken platform caters to newcomers and retail investors.
Collateral provided by loan recipients is stored in separate, dedicated wallets. This collateral appears in Kraken’s Proof of Reserves verifications, which confirm customer holdings on a one-to-one basis.
Should a borrower breach maintenance thresholds or allow a loan to lapse unpaid, Kraken reserves the right to liquidate the posted collateral. Early loan settlement is permitted using available account funds, though an early repayment charge is assessed.
Kraken hasn’t published exact loan-to-value percentages for Flexline. According to the exchange, loan approvals occur almost immediately once a user deposits eligible digital assets as security.
Flexline remains unavailable in the United States, United Kingdom, Canada, Australia, Switzerland, UAE, Brazil, India, and New Zealand.
Coinbase Also Expands Crypto Lending
The Flexline rollout coincides with Coinbase broadening its collateralized lending service. Qualified US customers now have access to loans of up to $100,000 in USDC by pledging holdings like XRP, Dogecoin, Cardano, and Litecoin.
US home loan provider Rate unveiled RateFi, a program permitting approved applicants to utilize confirmed cryptocurrency portfolios toward loan qualification standards. The initiative recognizes digital holdings as reserves and potentially income sources, eliminating the need for asset liquidation.
DeFi Lending Continues to Grow
Decentralized lending platforms currently manage roughly $51.9 billion in total value locked, based on DefiLlama data. Approximately $30.8 billion of this amount represents active loans.
Aave dominates the sector with nearly $26.9 billion in TVL. Morpho protocol holds the second position with approximately $5.8 billion.
On February 15, Apollo Global Management, overseeing $940 billion in assets, established a partnership with Morpho to strengthen blockchain-based lending frameworks. Apollo indicated potential acquisition of up to 90 million MORPHO tokens through this arrangement.
Kraken’s Flexline debut also follows the platform’s recent introduction of tokenized equity perpetual futures on its licensed derivatives exchange. This service provides qualified international clients with round-the-clock leveraged access to US equity indices, gold, and select corporations including Apple, Nvidia, and Tesla.
