Coinbase Launches Fixed-Rate USDC Loans Backed by Bitcoin

Coinbase has launched fixed-rate USDC loans backed by cbBTC, expanding borrowing options for customers who want liquidity without selling their Bitcoin holdings. The new service operates through Morpho Midnight on the Base blockchain, with interest rates and maturity dates fixed when loans are initiated.

The product complements Coinbase’s existing variable-rate borrowing service powered by Morpho Blue. Customers currently hold more than $1.4 billion in outstanding loans through that offering, backed by approximately $3 billion in collateral.

Morpho Midnight, launched on Base in July, allows borrowers and lenders to agree on fixed interest rates and repayment periods. Coinbase manages the customer-facing experience, while Morpho provides the lending infrastructure and Base processes onchain transactions.

Coinbase yield and investments product lead Jacob Frantz said fixed-rate borrowing gives customers greater flexibility in managing credit while accessing liquidity without selling their crypto assets.

Current loan terms mature either at the end of the ongoing month or the following month. Coinbase defines the end-of-month maturity as the final Friday of that month. Borrowers must repay their USDC balance before the deadline or lenders may claim the cbBTC securing the loan.

Rates are determined by borrower and lender supply and demand through an onchain order book, providing users with certainty over borrowing costs once an agreement is reached.

The expansion comes as Coinbase broadens its financial services. The exchange has started rolling out 24/7 access to nearly 4,000 U.S. stocks for eligible UK customers, including fractional shares and funding through GBP or USDC. It has also introduced IPO access for eligible U.S. retail investors.

Morpho Midnight currently holds about $30 million in deposits. By comparison, Morpho Blue has approximately $5.2 billion in outstanding loans and $16 billion in deposits across its broader ecosystem.

Morpho has indicated that Midnight could eventually support structured credit and loans backed by tokenized real-world assets, with additional integrations planned.