KeyTakeaways:
- Coinbase now offers Bitcoin-backed loans for up to $100K USDC via the Morpho protocol.
- Borrowers can access funds instantly by pledging Bitcoin as collateral, converted into cbBTC.
- Flexible loan repayment terms are available, with liquidation triggered if Bitcoin value drops.
Coinbase has introduced a new service that allows its users to borrow up to $100,000 in USDC without selling their Bitcoin holdings. This service leverages the Morpho DeFi protocol on Coinbase’s Base blockchain, providing customers with quick access to liquidity. The initiative aims to offer flexibility and ease of access to funds while securing loans with Bitcoin as collateral.
The process is simple and efficient. Users can pledge their Bitcoin via the Coinbase app, which is then converted into cbBTC, a wrapped version of Bitcoin that functions within the decentralized finance ecosystem.
Once converted, the collateral is transferred to the Morpho protocol, enabling borrowers to receive USDC loans directly into their Coinbase accounts. The loan is processed almost instantly, making it easy for users to access funds for various needs, such as expenses or transfers.
This loan service operates with flexible repayment terms and no fixed repayment schedule. Borrowers can choose when and how to repay the loan if the loan-to-value (LTV) ratio stays within safe limits. However, if the value of Bitcoin falls too low, the collateral will be liquidated to cover the loan, ensuring the security of the transaction.
Currently, this service is only available to US customers, excluding those in New York. Coinbase plans to expand the service to other markets in the future. In addition to Bitcoin, Coinbase also intends to incorporate other digital currencies as collateral for loans in future updates. This move is part of the company’s ongoing efforts to blend traditional financial services with the decentralized finance space.
Besides launching Bitcoin-backed loans, Coinbase has also introduced new trading pairs, including the Peanut the Squirrel (PNUT) meme coin on the Solana network. The PNUT-USD pair will be available starting this January, marking another expansion of the platform’s offerings.
