Coinbase launches fixed‑rate USDC loans backed by Bitcoin

Coinbase has added a new lending product that lets users take out USDC loans secured by Bitcoin, with the interest rate and repayment schedule fixed at the time of borrowing. The offering provides borrowers with certainty over cost and term, contrasting with the platform’s existing variable‑rate loans.

How the product works

The fixed‑rate loans run on Morpho Midnight, a non‑custodial DeFi protocol for fixed‑term crypto credit. Transactions settle on Base, Coinbase’s Ethereum layer‑2 network. When a user initiates a loan, the amount of USDC, the fixed APR and the repayment date are locked in.

Relation to Coinbase’s existing lending business

Coinbase’s current variable‑rate lending, built on the Morpho Blue protocol, holds more than $1.4 billion in active loans backed by nearly $3 billion of collateral. The new fixed‑rate option sits alongside this product, expanding the range of credit terms available to customers.

Market context

Bitcoin‑backed credit is estimated at roughly $16 billion and is projected to grow to $130 billion by 2030. Fixed‑rate Bitcoin loans have been offered by other lenders such as Ledn and SATL Lending, but Coinbase’s version is notable for being integrated into a mainstream exchange app and executed on‑chain via a DeFi protocol.

Industry response

Paul Frambot, co‑founder and CEO of Morpho, said the partnership with Coinbase is scaling on‑chain credit products toward broader market diversity. A recent survey of cryptocurrency holders in the United States and Australia found that 88 % would consider a crypto‑backed loan or credit product.