Coinbase Launches Fixed USDC Loans Backed by Bitcoin
The new option runs on Morpho Midnight through Base and makes onchain borrowing more predictable. Coinbase is adding fixed terms alongside its existing floating-rate loans.
Key Takeaways
- Coinbase has launched fixed USDC loans backed by bitcoin, with the interest rate and repayment date known upfront.
- The new lending option runs on Morpho Midnight and Base, alongside existing loans with variable interest.
- For now, the fixed version is only available to customers in the U.S. outside New York.
Coinbase has rolled out fixed USDC loans backed by bitcoin. When users borrow, they see the interest rate and repayment date right away, instead of a variable rate that can still change later. That gives the crypto exchange a second lending option alongside its existing floating-rate loans.
Fixed Rates Alongside Variable Loans
The new option runs on Morpho Midnight, a decentralized lending protocol for fixed terms and fixed rates. The loans are handled on Base, Coinbase’s Ethereum layer 2 network. That marks a clear move away from the old model on Morpho Blue, where the rate moves with supply and demand and can rise when borrowing demand increases.
Coinbase says this makes onchain borrowing more predictable for users who want to know upfront what a loan will cost and how long it will last. The fixed version sits alongside the existing floating-rate loans, which according to available figures have more than $1.4 billion (€1.2 billion) in active loans and nearly $3 billion (€2.6 billion) in collateral.
What Makes Morpho Midnight Different
Morpho Midnight launched in July and is set up as a non-custodial protocol. According to the explanation, it was intentionally kept compact, with about 1,100 lines of code, to reduce the chance of bugs and attack surfaces. In practice, users can borrow or lend through the protocol with a fixed end date, while the market unit price determines the implied fixed rate for the remaining term.
That makes the service different from many earlier bitcoin-backed loans, which have existed for years at companies like Ledn and SATL Lending. The main difference here is the combination of a DeFi app and a major consumer app, bringing onchain credit closer to a wider audience.
Why This Matters for Bitcoin Holders
For European crypto readers, the key point is that bitcoin is increasingly seen not just as an investment asset, but also as collateral for credit. The bitcoin-backed credit market is now estimated at about $16 billion (€14 billion), while some forecasts point to growth toward $130 billion (€113 billion) in 2030. A survey of 1,244 crypto holders in the U.S. and Australia also found earlier this year that 88% would consider a crypto-backed loan or credit product.
That shows there is demand for products that let people use BTC without selling it right away. Coinbase is tapping into that with these fixed USDC loans, although the new option is for now only available to customers in the U.S. outside New York.
Meanwhile, Coinbase is expanding more broadly with new products to become less dependent on trading fees. In an earlier product push, the company also focused on derivatives, tokenized stocks, and lending, showing that credit and other onchain services are playing a bigger role in its strategy.
