Key Highlights
- Coinbase launches ETH-backed loans, letting U.S. users (excluding New York State) borrow USDC without selling Ethereum.
- Loans run on Morpho’s on-chain lending protocol and offer flexible, no-schedule repayment.
- The rollout aligns with Coinbase’s global expansion as ETH trades below $3K.
Coinbase has launched Ethereum (ETH)-backed loans, giving U.S. customers, excluding New York, the ability to borrow USDC without selling their ETH. The rollout, announced Nov. 20, extends Coinbase’s new crypto-collateral lending product, which previously supported only Bitcoin (BTC).
Users can now borrow up to $1 million in USDC against ETH and up to $5 million against BTC, with no fixed repayment schedule. According to the report, loans are powered by Morpho, an open-source lending protocol on Base, and are disbursed within seconds.
Growing trend of ETH-backed loans
Borrowing against ETH allows holders to access liquidity during volatile markets without triggering a taxable sale or losing exposure to the asset. It follows a trend across DeFi where Ethereum is increasingly treated as a productive asset rather than a passive investment.
Coinbase automatically converts pledged ETH into Coinbase Wrapped Staked ETH (cbETH) equivalents before transferring it to Morpho’s smart contracts. Interest rates update dynamically every block, and users can repay at any time. Liquidations occur only if loan amounts approach collateral thresholds.
Coinbase’s expansion
The launch follows Coinbase’s recent expansion of DEX trading in Brazil, reinforcing the exchange’s pivot toward global on-chain infrastructure. The company plans to extend DEX access to more networks, including Solana, and additional international markets.
The move signals Coinbase’s strategy to blend centralized reliability with Base-powered on-chain services, from DEX aggregation to wrapped Bitcoin (cbBTC) and now crypto-secured lending.
ETH under pressure as loans go live
The timing aligns with a shaky market. Ethereum is trading around $2,885, facing selling pressure as Bitcoin struggles below $87,000. More than $1 trillion has evaporated from crypto markets over the past six weeks, driven by tech-sector weakness and concerns over U.S. rate policy.
Despite the downturn, Ethereum has shown relative resilience compared with Bitcoin, with analysts pointing to “smart money” liquidity zones that could support a recovery.
Next steps
Coinbase has indicated its plans to expand crypto-backed loans to more countries in 2026. With on-chain credit markets expanding and Ethereum’s role in DeFi deepening, crypto-collateral lending is expected to grow, even as ETH navigates one of its most volatile periods of the year.
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