Coinbase launches fixed‑rate USDC loans backed by cbBTC

Coinbase now offers borrowers a choice between variable‑rate and fixed‑rate USDC loans that are secured with cbBTC, an ERC‑20 token representing Bitcoin held in custody. The new product runs on the Base network and is powered by the Morpho Midnight protocol.

How the fixed‑rate product works

Borrowers pledge cbBTC as collateral and receive USDC at a pre‑set interest rate and maturity date. The loan must be repaid before the agreed deadline; otherwise the lender can claim the cbBTC collateral. Fixed‑rate offers are posted on an on‑chain order book, and borrowers select the terms that match their needs. Coinbase currently provides two maturity options: the last Friday of the current month or the last Friday of the following month.

Comparison with the existing variable‑rate service

The variable‑rate offering, which runs on Morpho Blue, adjusts interest rates continuously based on supply and demand. In contrast, the fixed‑rate loans lock in costs at the time of acceptance, eliminating the risk of rate changes during the loan term. Both products allow users to access liquidity without selling their Bitcoin exposure.

Protocol and infrastructure details

Morpho Midnight matches borrowers with lender offers using an intent‑based peer‑to‑peer system, allowing lenders to keep capital in variable‑rate markets until a fixed‑rate offer is accepted. The protocol currently holds roughly $30 million in deposits during its initial rollout. Morpho Blue continues to support Coinbase’s variable‑rate loans, which have more than $1.4 billion outstanding and are secured by about $3 billion in collateral.

Eligibility and collateral mechanics

Eligible U.S. customers can borrow USDC while keeping Bitcoin exposure through cbBTC. Coinbase converts the pledged Bitcoin into cbBTC and transfers it to a Morpho smart contract on Base. Loan‑to‑value limits apply, and borrowers may face liquidation if the value of cbBTC falls relative to the debt, even though the interest rate remains fixed.

Broader product context

Coinbase’s on‑chain credit service also includes a USDC lending side, which recently expanded to Brazil, attracting nearly $500 million in deposits. The exchange continues to broaden its offerings with tokenized stocks, fractional equity, and retail IPO access in selected markets.