Coinbase Launches Fixed-Rate USDC Loans Against Bitcoin

Coinbase now offers fixed-rate loans that allow users to borrow USDC against bitcoin holdings. The interest rate and repayment date are locked in at the moment of origination.

This product settles on Base, Coinbase’s Ethereum layer two network. It runs on Morpho Midnight, a protocol designed for fixed-term noncustodial lending.

New Fixed-Rate Lending Structure

The new option complements Coinbase’s existing variable-rate business. That current book holds over $1.4 billion in active loans. These loans are backed by nearly $3 billion in collateral.

Existing loans operate on the Morpho Blue protocol. Rates there fluctuate based on supply and demand conditions. Borrowers face rising costs when demand spikes in the market.

Onchain Credit Market Growth

The bitcoin-backed credit market is currently sized at roughly $16 billion. Apyx and BitcoinTreasuries.net compiled this data in their recent report. Estimates suggest the market could reach $130 billion by 2030.

Protocol Theory surveyed 1,244 holders in the U.S. and Australia. Eighty-eight percent of respondents said they would consider a crypto-backed loan. This indicates strong demand for accessible credit products.

Mainstream Adoption of DeFi

Paul Frambot, CEO of Morpho, stated the joint products have been successful. The companies are now focusing on scaling these specific loan types. They aim to bring onchain credit closer to global market diversity.

CoinDesk notes this move integrates DeFi features into a mainstream consumer app. Lenders like Ledn have offered fixed rates for years. Coinbase distinguishes itself by bringing this structure directly onchain.