Coinbase is pushing deeper into onchain finance with the launch of Ethereum-backed loans for eligible U.S. customers. This new offering allows users to borrow up to $1 million in USDC without selling any of their ETH holdings. The rollout represents one of the exchange's most significant DeFi-integrated services to date, following closely behind its recent increase of the Bitcoin-backed loan limit to $5 million.
The program is powered by Morpho, a lending protocol that operates on Base, Coinbase's own Layer 2 network. While Coinbase serves as the access point for users, the loans are executed entirely through Morpho's smart contracts. This structure allows users to interact with DeFi liquidity while benefiting from the ease of use provided by a 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).
How The New ETH Loans Work
This lending offering is accessible to users in most of the United States, excluding New York due to regulatory restrictions. Users can deposit ETH as collateral and receive USDC, which avoids triggering a taxable event that would occur if they sold their Ethereum outright. Borrowers are responsible for monitoring their loan-to-value ratio. Positions will be automatically liquidated if they reach an 86% LTV, a measure designed to account for the inherent volatility of crypto-backed credit.
Coinbase has indicated that the feature will soon be expanded to support additional assets. This will include cbETH, the platform’s staked-ETH derivative, providing users with greater flexibility to leverage their long-term holdings.
Base Hits New Lending Milestone
The timing of this launch aligns with significant growth in the Base ecosystem. Onchain lending across the Base network has now surpassed $1.25 billion, fueled by increasing activity in both institutional and retail credit markets. Morpho, specifically, has experienced substantial inflows recently, as traders and long-term holders utilize collateralized borrowing to unlock liquidity without relinquishing potential upside exposure.
By increasingly integrating with DeFi rails and offering more avenues for users to borrow against major cryptocurrencies, Coinbase is positioning itself at the forefront of the evolving landscape of crypto-native credit markets.