Coinbase Introduces ETH-Backed Loans for US Users
Coinbase is providing US users with a new method to utilize their Ethereum without needing to sell it. The company has announced that customers can now borrow USDC while keeping their ETH locked as collateral. Borrowing against an asset means using what you own to secure a loan, offering access to cash while retaining your investment. This feature aims to make such financial tools accessible to a broader range of investors.
Understanding ETH-Backed Loans
ETH-backed loans operate on a straightforward principle. Users deposit their Ethereum into a secure account. Coinbase then enables them to borrow USDC, a stablecoin designed to maintain a consistent value. While the ETH remains in the user's ownership, it cannot be transferred until the loan is repaid. Many long-term holders find this option attractive as it allows them to keep their ETH in the market while accessing funds for immediate needs.
For instance, a small business owner who acquired Ethereum during a previous market downturn could leverage their holdings. With Ethereum's value reportedly increasing by over 40% this year, the business owner can borrow USDC against their ETH instead of selling it to cover a short-term expense.
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
The proliferation of on-chain financial tools has been a significant trend throughout 2024, with major platforms actively introducing features that grant users greater control over their cryptocurrency. Coinbase's expansion into the loan market signifies a step towards mainstream adoption of these services. With its extensive user base in the US, Coinbase is positioned to introduce borrowing tools to individuals who might not have previously explored similar offerings on decentralized platforms.
Accessing Loans on Coinbase
To utilize crypto-backed loans on Coinbase, users can navigate to the Cash tab within the app, select Borrow, and specify the amount of USDC they wish to borrow against their Bitcoin. The borrowing limit can extend up to one hundred thousand USDC, contingent on the amount of BTC pledged as collateral. This feature is initially available on the app before being rolled out to the web platform.
Powered by @Morpho. Running on @base.
More assets coming soon, including loans against staked ETH (cbETH).
Learn more ↓https://t.co/K9oAK7tMXn
— Coinbase 🛡️ (@coinbase) November 20, 2025
Upon confirming the loan amount, the selected BTC is converted into cbBTC and transferred on-chain to a Morpho smart contract. This contract then immediately disburses the USDC loan to the user's Coinbase account. The interest rate is dynamic, adjusting in real-time as Morpho updates it with each new block on the Base blockchain. There is no fixed repayment schedule, providing users with the flexibility to repay the loan at their convenience.