Kraken, a leading and regulated crypto exchange, now offers its EU clients crypto-collateralized perpetual futures via its Kraken Pro platform. These changes enable traders to use their BTC, ETH, and certain stablecoins as collateral when trading over 150 perpetual futures markets.
With these updates, Kraken users in the EU can unlock flexibility and capital efficiency while complying with Europe’s MiFID II framework.
Become a Kraken Pro and benefit from versatile, regulated, and secure futures trading, or read on to discover all the advantages of crypto collateral.
Kraken Marks a New Era for Regulated Crypto Derivatives in Europe
Kraken is one of the first platforms to offer its clients regulated crypto derivatives under the MiFID II framework in Europe. This shows the platform’s commitment to regulatory standards and creating a safe and compliant trading environment for all users.
The US and Asian regulatory bodies are closely watching Europe’s MiCA regulation as a benchmark for their own frameworks. While these jurisdictions differ in their regulatory approach to crypto, both the US and Asia are showing interest in aligning with some aspects of Europe’s legal structure to avoid regulatory arbitrage.
How Futures Traders Benefit From Crypto Collateral
When trading futures on leverage, you have to use collateral as a guarantee that you’ll repay the funds borrowed for the leverage. Previously, users could only post fiat currency as collateral. With the new update, Kraken Pro users in Europe can now select their BTC, ETH, or stablecoins as collateral.
This solves several issues from the start. For example, to deposit fiat, it may take some time for all the conversions and fees to be processed and for your funds to be credited to your account. This can cause unnecessary friction.
Kraken has now unlocked the use of your crypto holdings or stablecoins as collateral for USD-margined futures, completely removing the need for fiat. When you need capital as collateral fast, using your crypto assets could be an excellent option.
Additionally, you can use your BTC or ETH as collateral when hedging. For example, you hold BTC and don’t want to sell it, but you see weakness in BTC’s price and want to profit from this weakness without selling your BTC. In this case, you can open a BTC short position while using your existing BTC as collateral.
Once the BTC price has stabilized, you can close your short position and release your collateral. In this case, you didn’t sell your BTC, and you profited from your short position.
You can also use this feature to go long on BTC without using fiat. Instead of traditional currencies, use your BTC as collateral to open a leveraged long position on BTC and take advantage of Bitcoin’s price increase.
Key Benefits for Traders
Traders and institutions in Europe will benefit the most from these updates. Some of the benefits include:
- BTC, ETH, or stablecoins can be used as margin for perpetual futures.
- No more fiat conversion fees and delays, which can speed up the process of opening trades.
- Diversification of collateral types in case some of the assets lose value.
- Optimized capital efficiency through cross-asset leverage.
- Maintaining crypto exposure without selling.
MiFID-Compliant and Ready for the Market
Kraken has built its futures trading platform to comply with local regulations and frameworks worldwide. The EU rollout is one of the first important expansions, with more regions to follow.
In the EU, Kraken offers the first MiFID-regulated platform for trading crypto-collateralized perpetual futures. Users get up to 10x leverage and can use multiple assets as collateral, such as BTC, ETH, stablecoins, and EUR. Asset custody is fully under MiCA and MiFID II supervision.
The best part? It’s all integrated within the Kraken Pro platform, both on the web and on mobile.
Step-by-Step Guide to Trading with Crypto Collateral on Kraken Pro
Trading futures on Kraken Pro using crypto as collateral is straightforward. Here’s how to do it:
- Visit the Kraken website and open an account.
- Complete the verification process and accept the terms under Kraken EU.
- Fund your account by transferring BTC, ETH, or stablecoins to your Kraken Pro spot wallet.
- When you open or manage your position, select your collateral asset.
- Use up to 10x leverage on perpetual futures to trade directional positions or use hedging strategies.
As simply as that, you can enjoy trading on Kraken Pro and benefit from institutional-grade security and regulatory compliance.
Helping Traders Unlock the Full Potential of Their Crypto Holdings
Kraken is a veteran in the crypto space, having been one of the top exchanges since its launch in 2011. Throughout its history, the exchange has strongly adhered to its mission to give users better control over their assets, enable capital efficiency, and provide access to the crypto markets under a transparent and regulated structure.
The platform’s regulated crypto collateral options in the EU mark the next step towards building a global regulated crypto infrastructure in key areas worldwide. With this feature, Kraken Pro is setting the benchmark for regulated futures trading in the EU.
