Emre Yumlu 
Coinbase reintroduces Bitcoin-backed loans for U.S. users via Morpho, bringing crypto-collateralized borrowing back into play.
Coinbase (COIN) is adding Bitcoin-backed loans to its U.S. product lineup, leveraging Morpho, the largest lending platform on the Base network, to attract attention and users to its growing on-chain economy.
Coinbase Brings Easy Access to Bitcoin-Backed Loans via Morpho
This lending product is not entirely new: users on Base have long been able to borrow USDC against their Bitcoin through Morpho or other DeFi services.
What’s new here is the ease of access: Coinbase is integrating Morpho’s lending books into its own popular user interface, removing barriers to entry.
Max Branzburg, Coinbase’s Head of Consumer Products, stated: “This is a moment where Coinbase is planting a flag on-chain, bringing millions of users and billions of dollars with us.”
Personal loans in the on-chain world fundamentally differ from the traditional loan agreements offered by banks and lenders. In the traditional economy, institutions rely on credit scores to decide whether to approve loans and determine their terms, regardless of whether the loan is secured or not.
However, in the crypto space, credit scores do not exist. Platforms like Morpho don’t need to assess how trustworthy their borrowers are. Instead, they require borrowers to post significantly more collateral than the amount they intend to borrow. This setup protects platforms from carrying bad debt caused by defaults.
Coinbase Unveils a New Structure for Bitcoin-Backed Loans
Coinbase’s structure caps each loan at $100,000 in USDC. To borrow such a high amount, customers will need to post more Bitcoin than the value of the loan. Morpho will start liquidating the collateral if the loan-to-value ratio increases too much.
Max Branzburg explained: “If price fluctuations reach any dangerous level, we will share liquidation warnings through the Coinbase app so that you are aware and can act accordingly.”
Cash borrowing forms the foundation of all financial services but holds extra appeal for crypto investors, who often sit on tokens they refuse to sell. These investors frequently take loans to farm airdrops and finance other risky trades. According to Coinbase, loans facilitated through Morpho could help borrowers pursue potentially nobler goals, such as buying a car or paying for a house.
The new structure feeds Coinbase’s “flywheel” mechanism at every step. First, this rollout adds a new capability to Coinbase’s front end.
Second, users posting BTC as collateral are minting cbBTC (Coinbase’s wrapped Bitcoin on Base) and borrowing USDC (Coinbase’s stablecoin).
Third, all these transactions occur on Morpho (a Coinbase-funded lending platform) and Base (Coinbase’s Layer 2 network).
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