Catenaa, Monday, October 06, 2025- Coinbase has originated over $1 billion in bitcoin-backed onchain loans through the DeFi protocol Morpho, just eight months after the service launched in January.
CEO Brian Armstrong outlined the next milestone: $100 billion in onchain borrow originations.
The platform allows users to borrow USDC against their bitcoin holdings without selling the underlying asset, avoiding taxable events.
Initial loan caps of $100,000 were increased to $1 million by April, with plans to soon offer up to $5 million per user. Coinbase acts as an interface for Morpho on Ethereum Layer 2 Base, while the protocol manages loans directly.
Collateralized loans require a minimum 133% collateral ratio, with liquidation triggered if debt reaches 86% of collateral value.
Interest rates are automatically adjusted each block, and repayment schedules remain flexible as long as users maintain a healthy loan-to-value ratio. Currently, bitcoin is the only accepted collateral, though Coinbase plans to expand to additional cryptocurrencies.
The move follows the retirement of Coinbase’s previous retail bitcoin-backed loan program in November 2023 due to an SEC legal dispute. Armstrong described the initiative as “TradFi in the front, DeFi in the back,” reflecting a hybrid approach to borrowing.
The service is available to US residents, excluding New York, and aligns with Coinbase’s broader onchain lending ecosystem, which recently introduced USDC lending with yields up to 10.8%.
The milestone underscores rapid adoption of DeFi-based borrowing tools and highlights Coinbase’s growing role in bridging traditional finance with decentralized protocols.
