TLDR Users can borrow up to $1 million in USDC. Over $100 million in USDC loans issued to date. Minimum collateral ratio of 133% is enforced. Coinbase, the largest cryptocurrency exchange in the U.S., has introduced a new onchain USDC lending service. This service allows users to borrow USDC against Bitcoin holdings, with interest rates currently reaching up to 10.8%. The integration utilizes the Morpho protocol on Base, Coinbase’s Ethereum Layer 2 network. This move aims to bridge decentralized finance (DeFi) products with mainstream adoption. It also seeks to provide tax-efficient liquidity to Coinbase users. New Lending Service and Key Details According to Coinbase’s official blog, as of April 30, 2025, customers can borrow up to $1 million in USDC without selling their Bitcoin. The lending is powered by Morpho, an onchain protocol built on Base. Competitive interest rates are offered through Morpho’s open market lending pool. The service not only expands Coinbase’s financial offerings but also leverages Morpho Labs’ expertise. Morpho Labs is known for optimizing DeFi lending rates with their peer-to-peer matching engine. The Base network, launched by Coinbase, aims to scale Ethereum transactions efficiently. Significant Loan Issuance and Collateral Details The new service has seen over $100 million in USDC loans issued, pointing to robust demand and institutional engagement. Currently, Bitcoin is the only accepted collateral for these loans. A minimum collateral ratio of 133% is enforced. Automatic liquidations occur if the loan-to-value (LTV) reaches 86% of the collateral. This onchain lending arrangement contributes directly to decentralized finance total value locked (TVL) on Base. Historical Context and Token Impact This isn’t Coinbase’s first foray into lending. Previous initiatives faced regulatory pushback due to less integration with onchain protocols. In contrast, decentralized platforms like Aave and Compound have driven growth in stablecoin liquidity on Ethereum Layer 1. The affected assets include BTC as collateral, USDC for lending, and BASE for facilitating transactions. Though not supported as collateral yet, ETH might become part of Coinbase’s future plans based on expansion strategies with Base. Regulatory Considerations and User Accessibility The USDC lending service is available to U.S. residents, excluding New York due to state regulations. Coinbase emphasizes transparency and compliance, especially as a publicly listed company. Community and developer sentiments suggest positive reception. The integration with Morpho highlights a shift towards modular and DeFi-native services. Coinbase intends to expand the service to support more tokens and regions in the future. Access USDC loans without selling your Bitcoin assets. Explore loan options with USDC on Coinbase. Understanding the implications of the Genius Act on USDC. Disclaimer:The content on defiliban.com is provided for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry inherent risks. Please consult a qualified financial advisor before making any investment decisions.
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