Borrow Against Your Bitcoin at a Fixed Rate: Coinbase Expands Morpho Loans
Coinbase has launched fixed-rate loans that allow users to borrow USDC against Bitcoin with the interest rate and repayment date set at origination. The product is powered by Morpho's lending infrastructure—specifically Morpho Midnight—and settles on Coinbase's Base network, marking the protocol's first enterprise-scale fixed-rate deployment.
Why It Matters
Introducing fixed rates and defined maturities brings a hallmark of traditional credit markets to on-chain lending, which has largely relied on floating rates. Deploying this at Coinbase's scale could broaden how crypto holders access liquidity without selling assets and signal wider adoption of structured lending primitives on-chain.
Key Facts
- Product: Fixed-rate USDC loans collateralized by Bitcoin
- Launch timing: Announced Tuesday (source)
- Infrastructure: Coinbase app (front end), Morpho (credit infrastructure), Base (settlement)
- Morpho deployment: First enterprise-scale deployment of Morpho Midnight
- Existing Morpho loans: Over $1.4 billion in active loans backed by roughly $3 billion in collateral
Coinbase introduced a fixed-rate borrowing option that lets users lock in both the interest rate and the repayment date when taking out USDC loans secured by Bitcoin. The offering departs from the variable-rate structure that has been typical in decentralized lending, where borrowing costs fluctuate with market conditions. Under the new product, borrowers can choose certainty over cost and duration from the outset.
The feature is built on Morpho's lending stack, using Morpho Midnight to support fixed pricing and defined maturities. Coinbase manages the customer-facing experience through its app, Morpho supplies the underlying credit infrastructure, and settlement occurs on Coinbase's Base network. Morpho described this as its first enterprise-scale deployment of the Midnight upgrade.
This fixed-rate option complements Coinbase's existing variable-rate loans, which are also powered by Morpho. Coinbase began offering Bitcoin-backed borrowing on Base in early 2025 via Morpho, and that business has since grown to more than $1.4 billion in active loans secured by about $3 billion in collateral, according to Morpho. Coinbase has previously expanded its collateral set beyond Bitcoin to include assets such as XRP and Dogecoin and at times offered competitive servicing terms for U.S. borrowers.
The lending initiative has encountered volatility: a sharp fall in Bitcoin and Ethereum prices in February triggered record liquidations across Coinbase's loan portfolio, highlighting the risks of borrowing against volatile crypto collateral. Morpho said its design can be extended to support tokenized stocks and other real-world assets in the future, indicating potential for broader types of on-chain credit products.