Coinbase Restarts Bitcoin-Backed Loans via Ethereum Network Base

Coinbase is rolling out Bitcoin-backed loans nearly two years after it discontinued its Borrow service, right as the world’s oldest cryptocurrency is soaring to new heights.

Customers can borrow up to $100,000 in USDC stablecoin instantly through the firm’s centralized exchange platform, Coinbase said Thursday in a statement. The lending services will be powered by Morpho, a popular lending protocol on Base, the Ethereum layer-2 network that Coinbase incubated.

The loans will be collateralized at 133% of their value, a Coinbase representative told Decrypt. Interest rates are variable and calculated automatically by Morpho, according to shifting market conditions. Repayment schedules will have no cap or deadline as long as customers maintain a healthy loan-to-value ratio.

Coinbase debuted loans collateralized by Bitcoin in November 2021, but it stopped issuing them in May 2023 amid the crypto market downturn—and just a few weeks after the trading firm reportedly learned that it might face an enforcement action by the SEC. It also came at roughly the same time that Coinbase ramped up its existing legal battle against federal regulators.

Coinbase attributed the decision to discontinue the lending service at the time to shifting customer demands. The reintroduction of Bitcoin-based loans comes soon after the digital currency hit a new all-time high price above $108,000.

The token’s value has remained elevated on a wave of bullish news following Donald Trump’s election win: a number of lawmakers are floating Bitcoin reserve proposals at the state level, while reports emerged earlier this week that the SEC could pause enforcement actions against digital asset companies and make other crypto-friendly changes under President-elect Trump’s incoming administration.

Bitcoin is trading at $100,500 as of writing time, CoinGecko data shows.

The Bitcoin-backed loans will be available to traders throughout the U.S., with the exclusion of New York, according to Coinbase. The trading platform plans to expand Bitcoin-collateralized loans to other markets in the future, in addition to launching other crypto-backed lending options.

Edited by Andrew Hayward