Coinbase Launches On-Chain Loans Backed by Bitcoin
Coinbase launched a U.S. product allowing eligible customers to borrow USDC against Bitcoin collateral through the Morpho protocol on Base. The service brought Bitcoin-backed borrowing into a mainstream exchange interface without requiring users to sell their BTC.
Coinbase introduced a new borrowing product on January 16 that allowed eligible U.S. customers to pledge Bitcoin as collateral and receive USDC loans. Instead of recreating Coinbase's earlier centralized lending model, the new service routed the loan through the Morpho protocol on Base.
The user experience was designed to abstract much of the on-chain complexity. Customers could access the loan from Coinbase while their collateral and borrowing position were managed through decentralized-finance infrastructure. The product therefore connected a mainstream Bitcoin brokerage account to an on-chain credit market.
The historical distinction was the architecture. Bitcoin holders had long been able to borrow against BTC through specialized lenders, but Coinbase's product made that capability available through one of the largest regulated U.S. crypto platforms while using an on-chain lending protocol underneath. It expanded the practical financial uses of Bitcoin holdings beyond buying, selling and custody.