Crypto exchange Kraken has introduced Flexline, a crypto-backed loan product designed for Kraken Pro users who want to borrow against digital assets without selling them. The product offers fixed-rate loans with terms ranging from two days to two years, with proceeds issued in crypto or stablecoins.
Borrowed funds can be traded on the platform or withdrawn, depending on regional eligibility. Kraken describes its main platform as “geared toward beginners and individual investors, while Kraken Pro is for advanced and institutional traders,” positioning Flexline within its more sophisticated offering.
Users can post supported cryptocurrencies as collateral and receive funds almost instantly. Annual percentage rates range from 10% to 25%, according to Kraken’s website. The exchange has not disclosed specific loan-to-value ratios.
Collateral is held in segregated wallets and included in Kraken’s Proof of Reserves attestations, which the exchange says verify client assets on a 1:1 basis. If maintenance thresholds are breached or a loan reaches maturity without repayment, collateral may be liquidated.
Kraken said loans can be repaid early using an account balance, though early repayment fees apply. The product is not available in Australia, Brazil, Canada, India, New Zealand, Switzerland, the United Arab Emirates, the United Kingdom or the United States.
The geographic exclusions highlight how lending products remain one of the most sensitive areas of crypto regulation, particularly in the U.S., where enforcement actions in recent years reshaped how exchanges structure yield and borrowing services.
Flexline’s launch comes just one day after Kraken introduced tokenized equity perpetual futures on its regulated derivatives platform, offering eligible non-U.S. clients round-the-clock leveraged exposure to major U.S. stock indexes, gold and companies such as Apple, Nvidia and Tesla. Together, the two rollouts expand Kraken’s derivatives and credit stack for non-U.S. traders.
Kraken’s move arrives amid renewed momentum in crypto-backed lending across exchanges, decentralized finance and traditional institutions. After the collapse of several centralized lenders in 2022, many platforms retreated from aggressive yield and credit products. The current cycle looks more structured, with clearer collateral rules and tighter product scopes.
Coinbase recently expanded its collateralized loan program, allowing eligible U.S. users to borrow up to $100,000 in USDC against additional digital assets including XRP, Dogecoin, Cardano and Litecoin without liquidating holdings. The expansion suggests exchanges see demand from users who prefer liquidity over asset sales during volatile market conditions.
Outside of crypto-native firms, traditional lenders are also experimenting with digital-asset-backed credit. U.S. mortgage lender Rate introduced RateFi, enabling qualified borrowers to count verified cryptocurrency holdings toward underwriting requirements without converting them into fiat.
Decentralized lending protocols continue to scale. According to DefiLlama data, DeFi lending platforms hold roughly $51.9 billion in total value locked, with about $30.8 billion actively borrowed. Aave accounts for nearly half of that total with just under $26.9 billion in TVL, followed by Morpho at around $5.8 billion.
Institutional capital is also entering the space. On Feb. 15, Apollo Global Management partnered with Morpho to support blockchain-based lending infrastructure. The asset manager, which oversees roughly $940 billion, said it could acquire up to 90 million MORPHO tokens as part of the collaboration.
Taken together, centralized exchange products, DeFi lending pools and traditional finance initiatives point to a broader revival in crypto-collateralized credit. For exchanges like Kraken, products such as Flexline extend beyond simple margin features, embedding lending directly into core trading infrastructure while competing for users seeking capital efficiency without exiting their digital asset positions.
