Coinbase users can now borrow USDC against bitcoin at a fixed rate
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Coinbase has introduced fixed-rate loans allowing users to borrow USDC stablecoins against their bitcoin holdings, with interest rates and repayment dates fixed at loan origination. These loans operate on Morpho Midnight, a decentralized lending protocol, and settle on Base, Coinbase’s Ethereum layer 2 network. This product is an addition to Coinbase’s existing variable-rate lending, which currently has over $1.4 billion in active loans backed by nearly $3 billion in collateral.
Why it matters
Coinbase’s fixed-rate loan offering provides users with greater certainty regarding borrowing costs and repayment timelines compared to variable-rate loans. By integrating these loans onchain through a DeFi protocol within a mainstream consumer platform, Coinbase is advancing onchain borrowing models beyond predominantly variable-rate setups. The source highlights that this development is part of efforts to scale onchain credit closer to traditional global credit markets in size and diversity.
Key context
Coinbase previously only offered variable-rate loans that adjust based on supply and demand through the Morpho Blue protocol. Fixed-rate bitcoin-backed loans exist in the market via lenders like Ledn and SATL Lending, but Coinbase’s is notable for its onchain, DeFi app integration within a major exchange interface. The bitcoin-backed credit market is approximately $16 billion as of now and is projected to grow significantly by 2030. A survey cited from early 2026 found that 88% of crypto holders would consider crypto-backed credit products.
Key numbers and entities
Coinbase (Nasdaq: COIN) currently has over $1.4 billion in active variable-rate loans backed by nearly $3 billion in collateral. Morpho Midnight is the decentralized, noncustodial lending protocol for fixed-rate loans launched in July 2026. Paul Frambot is the CEO and co-founder of Morpho. The bitcoin-backed credit market size is roughly $16 billion and expected to grow to $130 billion by 2030. The survey included 1,244 cryptocurrency holders in the U.S. and Australia.
What remains unclear
The source does not specify the range or average of fixed interest rates offered on the new loans, nor does it detail lending terms such as minimum or maximum loan amounts. It is also not clear how the fixed-rate option will perform compared to the variable-rate loans under different market conditions or user adoption metrics so far.