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Coinbase users can now borrow USDC against bitcoin at a fixed rate
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Coinbase has launched fixed-rate bitcoin-backed loans, allowing users to borrow the USDC stablecoin against their bitcoin with interest rates and repayment dates locked in at the time of borrowing. The Nasdaq-listed exchange announced the offering on Tuesday, marking a significant expansion of its onchain lending services. Unlike the exchange's existing variable-rate loans, where rates fluctuate based on supply and demand, the new product gives borrowers full certainty over both cost and duration. The move is designed to take onchain borrowing beyond the predominantly variable-rate model that has dominated decentralized finance lending.
Coinbase's existing lending operations run on the Morpho Blue protocol, where interest rates are determined by market conditions and can spike when borrowing demand surges. That variable-rate business is substantial, carrying more than $1.4 billion in active loans backed by nearly $3 billion of collateral. The new fixed-rate option is built on Morpho Midnight, a decentralized, non-custodial lending protocol specifically designed for fixed-rate and fixed-term crypto loans, which launched in July of this year. Transactions settle on Base, Coinbase's own Ethereum layer 2 network, keeping activity fully onchain.
Fixed-rate bitcoin-backed loans are not entirely new to the market, with lenders such as Ledn and SATL Lending offering similar products for years. However, Coinbase's implementation stands out because it operates onchain through a DeFi protocol and is embedded directly inside a mainstream consumer application accessible to millions of users. This integration lowers the barrier for everyday bitcoin holders to access credit without moving their assets offchain or relying on traditional intermediaries.
Morpho co-founder and CEO Paul Frambot expressed enthusiasm about the partnership's progress. He said Morpho and Coinbase's joint products have been immensely successful, and the focus now is on scaling those efforts. In a post on X, Frambot said the companies are building on that foundation with new loan types and use cases, bringing onchain credit one step closer to the scale and diversity of global credit markets.
The broader bitcoin-backed credit market is currently valued at approximately $16 billion, according to the Bitcoin Digital Credit Report compiled by Apyx and BitcoinTreasuries.net. Some estimates project that figure could grow to $130 billion by 2030 as preferred equity structures continue to scale. Demand from holders appears strong: a Protocol Theory survey of 1,244 cryptocurrency holders across the United States and Australia, conducted between February and March 2026, found that 88% of respondents said they would consider taking out a crypto-backed loan or credit product.
As stablecoins increasingly move into regulated finance, the launch underscores Coinbase's strategy to deepen its role in onchain credit markets. By pairing a fixed-rate option with its existing variable-rate business, the exchange now offers borrowers a fuller range of choices for putting their bitcoin to productive use. The expansion also signals that DeFi lending protocols are maturing rapidly, with Coinbase and Morpho positioning themselves to capture a growing share of the global credit market.
