A collateral currency is a currency that can be used for trading using margin*.

The collateral currency you hold does not have to match the trading pair of the order book on which you plan to trade using margin. This is possible because when you open a position by purchasing or selling cryptocurrency on margin (going “long” or “short”), Kraken’s own funds are used to extend margin to you for the full amount of that purchase or sale.

Unstaked assets can be used as collateral for margin trading. Kraken Rewards assets (staked automatically) are eligible as collateral, while Kraken Pro Flexible Staking and Pro Bonded Staking assets are not eligible.

Note: Collateral currencies used to open a spot position on margin can not be exchanged for other currencies or withdrawn while the spot position on margin is open. This means that, although your digital assets that are reserved as collateral currencies will show in your account balance, these assets will not be available to trade or withdraw. To see the amount available to trade or withdraw in any given asset, navigate to the Funding tab through your Kraken account, then click on Withdraw next to the specific asset.