Quick Breakdown
- •Coinbase has unveiled a new borrowing service that allows eligible U.S. users to use their Ethereum (ETH) holdings as collateral to secure loans of up to $1 million in USDC.
- •This offering is powered by the Morpho lending protocol on Coinbase’s Base Layer-2 network, blending decentralized finance liquidity with a centralized interface.
- •The program lets borrowers maintain exposure to their ETH without triggering taxable events from sales, with automatic liquidation protection at an 86% loan-to-value ratio.
Coinbase’s ETH-Backed Loans Service
Coinbase has launched a new Ethereum-backed loan service that lets eligible U.S. customers (except those in New York due to regulations) borrow up to $1 million in USDC by using their Ethereum as collateral. Instead of selling their ETH, users can tap into liquidity while still holding onto their assets, meaning they can avoid the taxable events that typically come with selling.
The service runs on Morpho, a decentralized lending protocol built on Base, Coinbase’s Ethereum Layer 2. The result is a blend of on-chain security with the simplicity of a familiar, centralized platform.
If you believe in somΞTHing, this one’s for you.
ETH-backed loans are here.
You can borrow USDC against your Ethereum, unlocking liquidity without selling.
Available now in the U.S. (ex. NY). pic.twitter.com/eOvJ2BWPfr
— Coinbase 🛡️ (@coinbase) November 20, 2025
Expanding DeFi Integration and Market Reach
This loan product marks one of Coinbase’s most significant decentralized finance integrations, following earlier launches such as Bitcoin-backed loans, which recently raised to $5 million. On-chain lending within the Base ecosystem has surpassed $1.25 billion, reflecting booming demand from both institutional and retail markets seeking flexible credit solutions while retaining crypto assets. Coinbase’s strategic addition of ETH collateralized loans complements the ongoing growth in crypto-native credit, promoting borrowing without liquidation risk for positions maintained below an 86% loan-to-value threshold. Plans include supporting additional assets, such as cbETH, Coinbase’s staked ETH derivative, to broaden borrowing options further.
Coinbase is reportedly developing a prediction markets platform with Kalshi, a regulated operator. Screenshots show a Coinbase-branded interface for placing predictions on real-world events (politics, sports, science, economics) using USDC or USD. This aligns with other major crypto firms, like Crypto.com and Gemini, also preparing similar prediction market offerings.