Kraken allows crypto assets as collateral for derivatives in European Union

Crypto exchange Kraken has announced that European traders can now use crypto assets as collateral through its MiFID-regulated derivatives platform. The move expands Kraken's reach in the European Union, which previously only supported fiat collateral. Kraken has been granted a MiCA license by the Central Bank of Ireland and approved by the Multilateral Trading Facility (MTF) of the Cyprus MiFID entity and the UK's Financial Conduct Authority (FCA) to provide derivatives trading and global liquidity support to European Union users. Kraken's strategy allows European traders to use crypto assets as collateral within a regulated framework, while adjusting the conversion ratio according to asset volatility and automatically converting the value of crypto assets into US dollars for margin and clearing calculations. Kraken said that this new option mainly meets the needs of institutional customers and is expected to increase the flow of funds in the order book.