Coinbase Unlocks $1M Loans for U.S. Users Backed by Bitcoin

• Coinbase has fully rolled out its loan services to US customers through a collaboration with lending protocol Morpho. 
• According to Coinbase, users can borrow up to $1 million in USDC against their Bitcoin holdings with flexible repayment terms. 

Coinbase has announced that its Bitcoin-backed loan services are now fully available for users in the US. According to the report, this implies that customers can borrow up to $1 million USDC without selling their Bitcoin holdings.

The Details

In January 2025, Coinbase made the first official announcement on the launch of this groundbreaking loan product. However, users could only borrow up to $100,000, depending on the amount ready to be committed for collateral, as indicated in our previous publication. With the full rollout, customers are reported to stand a chance of avoiding taxable events.

Powered by open-source lending protocol Morpho, the loan payment is said to be instant, with flexible terms and competitive interest rates.

Getting a Bitcoin-backed loan on Coinbase is now easier and faster than ever. In under a minute, you can get a loan in USDC without ever having to sell your bitcoin.

Explaining how it works, Coinbase highlighted that users who borrow USDC against their Bitcoin holdings would automatically have their collateral converted to Coinbase Wrapped Bitcoin (cbBTC). Most importantly, this would be done on a 1:1 ratio and subsequently sent to the Morpho smart contract. Morpho would then disburse the amount, which would reflect in users’ Coinbase wallets instantly.

According to Coinbase, there are no fixed repayment schedules as borrowers are mandated to choose when they want to pay off their loans. Additionally, the interest rate is not fixed. Instead, it would be adjusted in real time based on the market conditions as determined by Morpho. Once the loan amount and its accompanying interest reach 86% of the collateral value, it will be liquidated.

More About the Coinbase and Morpho Loan Program

Researching the lending program, we found that Coinbase would merely facilitate the exchange. While traditional loans usually depend on credit scores, this would mainly be based on collateral. On the Morpho platform, there is a minimum collateral ratio of 133%.

This is not the first time Coinbase has entered the lending market. It can be recalled that its earlier “borrow” program officially ended in November 2023. The recent program is reported to offer the needed transparency and decentralized services that ensure that users stay on top of their needs.

Coinbase customers can now get easier, faster access to everyday financial services, leveraging on-chain innovation across Coinbase, Base, and the wider crypto economy. They benefit from the transparent, decentralized services enabled by on-chain protocols, which can now be accessed through a more seamless, intuitive user experience on Coinbase.

cbBTC, one of the active features in this program, was launched by Coinbase in September. In February, it rolled out proof of reserve for the cbBTC, as detailed in our earlier news article. After this, Coinbase disclosed that its annualized Bitcoin returns have been targeted at 4-8% with a new Bitcoin yield fund, as also explored in our previous news brief.