Coinbase brings Bitcoin-backed loans with Morpho’s DeFi integration

Key receivers

Powered by Morpho, Coinbase's Bitcoin-backed loans provide instant USDC, which leverages cbBTC for seamless on-chain implementation. This new offering follows Coinbase's withdrawal from its lending program in November 2023, signaling a renewed focus on Bitcoin lending.

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Coinbase introduced Bitcoin-backed loans through a partnership with Morpho, a decentralized financial protocol with a total value of $3.7 billion locked in.

This new service allows users to instantly borrow up to $100,000 in USDC without selling Bitcoin.

The service represents Coinbase's return to Bitcoin lending after its previous lending program, which offered cash loans backed by BTC holdings, ended in November 2023.

Users' Bitcoin holdings are converted into Coinbase-wrapped Bitcoin (cbBTC) at a 1:1 ratio and transferred to Morpho. The protocol sends USDC loans directly to users' Coinbase accounts in less than a minute.

The loans require a minimum collateral ratio of 133%, with borrowers able to adjust their loan-to-value (LTV) ratio above this limit.

If the loan balance reaches 86% of the collateral's market value, incurring default and penalty fees, the remaining bitcoins are returned to borrowers.

Interest rates are set by Morpho and automatically adjusted to market conditions, updating each block on the Base blockchain every few seconds.

The service does not feature minimum payments or fixed maturity dates as long as borrowers maintain the appropriate LTV ratio.

The service is available across the US except New York, with Coinbase planning a wider expansion. Although currently limited to Bitcoin, the exchange plans to add support for other tokens.

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