CoinDesk
Coinbase users can now borrow the USDC stablecoin against their bitcoin at a fixed interest rate and repayment date, both locked at origination. The product runs on Morpho Midnight, a decentralized, non-custodial lending protocol for fixed-rate and fixed-term crypto loans launched in July, and settles on Base, Coinbase's Ethereum layer 2 network.
The offering sits alongside Coinbase's existing variable-rate loans, which run on Morpho Blue and have more than $1.4 billion in active loans backed by nearly $3 billion in collateral. Floating rates there move with demand and supply, and can climb sharply when borrowing demand spikes. Fixed-rate bitcoin-backed loans themselves are not new, with lenders like Ledn and SATL Lending offering them for years, but Coinbase's version stands out for running onchain through a DeFi app inside a mainstream consumer platform.
Why it matters
The move takes onchain borrowing beyond the predominantly variable-rate model, giving users certainty over the cost and duration of their borrowing. Morpho co-founder and CEO Paul Frambot said the joint products have been immensely successful and that the focus now is on scaling: "new loan types and use cases, bringing onchain credit one step closer to the scale and diversity of global credit markets."
Market impact
The bitcoin-backed credit market is currently sized at roughly $16 billion, per a report from Apyx and BitcoinTreasuries.net, with estimates pointing to $130 billion by 2030 as preferred equity structures scale. Demand is clearly there: a Protocol Theory survey of 1,244 holders across the U.S. and Australia found 88% would consider a crypto-backed loan or credit product. For Ethereum ecosystem lending, a Nasdaq-listed exchange routing consumer credit through Base and Morpho is a significant legitimizing flow.
Frequently asked questions
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How do Coinbase's fixed-rate BTC-backed loans work?
Users borrow USDC against their bitcoin with the interest rate and repayment date set at origination. The loans run on Morpho Midnight, a decentralized, non-custodial lending protocol, and settle on Coinbase's Base network.
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How is this different from Coinbase's existing crypto loans?
Existing Coinbase loans run on Morpho Blue with variable rates that move with borrowing demand and supply. The new fixed-rate option locks the cost and duration at origination, sitting alongside the floating-rate book.
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How large is Coinbase's existing crypto lending business?
The variable-rate business has more than $1.4 billion in active loans, backed by nearly $3 billion in collateral, according to the announcement.
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How big is the bitcoin-backed credit market?
It is currently sized at roughly $16 billion, per the Bitcoin Digital Credit Report by Apyx and BitcoinTreasuries.net, with estimates of $130 billion by 2030 as preferred equity structures scale.
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What does demand for crypto-backed loans look like?
A Protocol Theory survey of 1,244 holders in the U.S. and Australia, conducted between February and March 2026, found 88% would consider a crypto-backed loan or credit product.
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