Crypto exchange OKX has launched crypto-backed loans in USDC in Europe, allowing clients to borrow up to 250,000 USDC, or 3.25 million USDC for VIP clients, with no fixed repayment term.
In its October 9 announcement, OKX said European clients can access flexible loans via the app or website, using cryptocurrency already held on the platform as collateral to borrow in USDC.
The company said accepted assets will include Bitcoin (BTC), Ethereum (ETH) and Solana (SOL), and each loan will be backed by collateral worth more than the loan amount. The announced borrowing limit is 80% of the value of the pledged assets, and there are separate limits for regular clients and VIP clients.
OKX loans accrue hourly interest with no fixed term
Under the launch terms, OKX allows borrowers to choose when to repay the loan instead of committing to a fixed repayment date. Clients can make partial payments or repay the entire outstanding amount, the exchange said.
At the time of the announcement, OKX listed a USDC interest rate of 0.000229% per hour, which amounts to roughly 2% per year. The company said borrowers can check the current rate before taking a loan and continue to monitor it in the app while the debt remains outstanding.
For updated information on borrowing costs, the exchange directed clients to the rates page rather than presenting the starting rate as a fixed fee for the entire loan term.
Explaining the intended purpose of the product, Erald Guse, CEO of OKX Europe, said long-term holders sometimes want access to cash while keeping their cryptocurrency.
“Many people in Europe hold cryptocurrency for a long time and don’t want to sell it to temporarily free up cash,” Guse said.
He described the repayment model as follows:
“Borrow USDC when you need it, pay for the hours of use, and return the money when you’re done.”
As use cases for borrowed funds, OKX listed trading, participation in X Drop Club, and use through the Earn program. According to the announcement, clients could also withdraw their USDC for everyday needs.
Collateral remains locked and can be liquidated
In its Europe loan terms updated on September 30, OKX lists OKX Europe Limited as the operator and restricts the provision of services to residents of the European Economic Area.
The agreement states that loan applications are matched with assets provided by lenders on the platform, and approved funds are transferred to the borrower’s account within the OKX system. Under the terms, pledged assets are frozen, preventing borrowers from trading or transferring them until the debt is secured.
The loan repayment agreement states that with a partial payment, the client first pays accrued interest and then the principal. OKX also states that full repayment of the principal and interest releases the corresponding collateral within one day, whereas partial repayment does not.
When a position reaches the established liquidation threshold, the agreement’s terms permit OKX to sell the collateral to repay the debt. The agreement warns that sharp price movements or technical delays may result in clients not receiving prior notice before automatic liquidation.
In line with regulatory requirements, OKX’s terms explicitly state that the lending service does not fall under MiCA and that client asset protections provided under that framework do not extend to assets associated with it.
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