Coinbase Introduces Bitcoin-Backed Loans with DeFi Integration

Coinbase has launched a new service allowing users to borrow up to $100,000 in USDC by using Bitcoin as collateral.
Built on the Morpho DeFi protocol and powered by its Ethereum-based layer-2 network, Base, this initiative bridges traditional finance and decentralized systems. Currently limited to U.S. customers, excluding New York, Coinbase may extend the service to other regions in the future.
This service enables Bitcoin holders to access liquidity without selling their assets. Borrowers pledge Bitcoin, which is converted into cbBTC—a wrapped version designed to interact with decentralized finance platforms. The cbBTC is deposited into Morpho, and USDC is instantly credited to the borrower’s account.
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Repayments are flexible, as users can pay back the loan on their own schedule, provided the loan-to-value (LTV) ratio remains secure. If Bitcoin’s value drops significantly, Coinbase will liquidate the collateral to manage risks.
While Bitcoin is the only collateral option for now, Coinbase plans to support additional cryptocurrencies in the future. This new offering reflects the company’s ongoing push to expand its services and integrate decentralized finance with accessible tools for retail and institutional users alike.