Coinbase has launched a crypto-backed USDC borrowing service for users in the UK, allowing customers to borrow against Bitcoin, Ether and cbETH held on the platform.
Users can access the service through the Coinbase app. Loans are issued in under a minute, with funds appearing in accounts within seconds, according to Coinbase. The initial collateral options are BTC, ETH and cbETH, and BTC-backed loans can reach up to USD $5 million, depending on the amount pledged.
The service runs on Morpho, an open-source lending protocol on Base, Coinbase's blockchain network. When a customer takes out a loan, the pledged collateral is moved on-chain into a Morpho smart contract, which then sends USDC to the user's Coinbase account.
The launch is part of Coinbase's broader push to expand its consumer finance offering in the UK. It adds lending to a local product lineup that already includes decentralised exchange trading and savings accounts, following the group's registration with the Financial Conduct Authority.
Loan terms
The product has variable interest rates set automatically by Morpho based on market conditions. Those rates can change every few seconds as new blocks are created on Base.
There is no fixed repayment schedule, and users can choose when to pay down their loan. In the app, customers can track loan health, annual percentage rate history and liquidation alerts, with notifications also sent by email and text message.
The service carries the standard risks of secured crypto lending. If the loan-to-value ratio, including accrued interest, rises above the liquidation threshold, the collateral can be sold to repay the loan, and Morpho charges a liquidation penalty fee.
This allows customers to access liquidity without selling their digital assets, but also exposes them to rapid changes in collateral value. The relevant threshold is shown before a user confirms the loan.
UK expansion
The UK rollout follows the earlier launch of the same borrowing product in the US. Coinbase said demand there had been strong, with total loan originations through Coinbase on Morpho exceeding USD $2.17 billion in USDC as of mid-April.
Coinbase described the UK launch as the first step in a wider international expansion of crypto-backed lending. It also plans to expand the range of eligible collateral beyond the three tokens currently supported.
The product is tied to USDC, the dollar-pegged stablecoin that users can send on supported networks without fees, except on Ethereum. UK customers can also convert borrowed USDC into pounds through their Coinbase accounts for everyday spending.
Coinbase One members who receive USDC through the service are automatically enrolled in rewards unless they opt out. They can earn up to 3.5% APY in USDC rewards, with the applicable rate shown in their accounts and subject to change.
The launch adds to a growing list of crypto lending and collateralised finance products aimed at retail users, even as the sector remains under scrutiny after a series of failures among centralised lenders in earlier market downturns. By routing the product through an on-chain protocol rather than an in-house lending book, Coinbase is relying on decentralised market infrastructure while keeping the customer interface within its own app.
For users, the offer is simple: pledge crypto, receive USDC, and monitor the position closely to avoid liquidation if markets move against them. For Coinbase, it is another attempt to turn digital asset holdings into a broader set of financial services within a single consumer platform.