Coinbase Launches Bitcoin-Backed Loan Service

Coinbase has launched a new Bitcoin-backed loan service in partnership with Morpho Labs, allowing U.S. users to borrow up to $100,000 in USD Coin (USDC) using their Bitcoin as collateral. This service operates on Coinbase's Ethereum layer-2 network, Base, and requires borrowers to overcollateralize their loans, converting Bitcoin into Coinbase Wrapped Bitcoin (cbBTC) for the transaction. The loans, which aim to provide liquidity without selling Bitcoin and incurring taxes, feature flexible repayment terms and no credit checks or fees. With the market for crypto-backed loans expected to grow significantly, this initiative positions Coinbase strategically within the decentralized finance (DeFi) space. Morpho, a leading DeFi protocol, manages the loan terms and interest rates, enhancing the utility of Bitcoin in a decentralized framework. This marks Coinbase's return to the Bitcoin lending market after discontinuing its previous Borrow program in 2023.