Coinbase has added fixed-rate USDC loans backed by cbBTC after its variable-rate borrowing service reached more than $1.4 billion in outstanding loans and nearly $3 billion in collateral.
Summary
- Coinbase customers can now choose between fixed-rate and variable-rate USDC loans backed by crypto.
- Fixed-rate loans set the interest rate and maturity when borrowers accept an onchain offer.
- Borrowers must repay before maturity, or lenders can claim the cbBTC securing the loan.
- Morpho Midnight runs the fixed-rate markets on Coinbase’s Base network.
Coinbase fixed-rate loans set costs in advance
Coinbase said the new borrowing option operates through Morpho Midnight, a fixed-rate and fixed-term lending protocol on Base. Customers pledge cbBTC as collateral and receive USDC without selling their bitcoin exposure.
Coinbase manages the customer interface, while Morpho supplies the lending protocol and Base processes the transactions. The product sits beside Coinbase’s existing integration with Morpho Blue, where interest rates change according to market conditions.
Unlike the variable-rate service, each Midnight loan establishes an interest rate and repayment date when the transaction begins. Lenders submit offers through an onchain order book, and borrowers select terms based on the available rates and maturities.
Coinbase currently offers maturities at the end of the current month or the following month. A company spokesperson said “End of Month” refers to the last Friday of the selected month.
Borrowers must return the USDC before the agreed date. If they miss the deadline, the lender can claim the cbBTC posted as collateral under the loan’s terms.
Fixed borrowing costs remove the possibility that an accepted loan’s interest rate will change before maturity. Variable-rate loans through Morpho Blue, by comparison, adjust as the amount of USDC supplied and borrowed changes.
“Coinbase Borrow gives our customers access to liquidity without having to sell their assets, and fixed-rate borrowing gives them even greater choice over how they manage that credit,” Coinbase yield and investments product lead Jacob Frantz said.
Morpho Midnight matches borrowers with lender offers
As crypto.news reported during the Midnight launch on Base, Morpho introduced the protocol in July to support fixed-rate loans with set maturities and negotiated terms.
Midnight uses an intent-based peer-to-peer system instead of placing every borrower into a pool with an automatically changing rate. Borrowers and lenders can set conditions that include the interest rate, maturity and counterparty requirements, according to Morpho.
Under the protocol’s offer-based design, lenders do not need to place funds into separate pools while waiting for a borrower. Morpho said their capital can remain in variable-rate markets until a fixed-rate offer is accepted, at which point the required liquidity moves into the matched loan.
Morpho Blue continues to handle Coinbase’s variable-rate product. More than $1.4 billion in loans remain outstanding through that service, secured by about $3 billion in collateral, according to the figures supplied with the announcement.
Across all integrations, Morpho Blue has approximately $5.2 billion in outstanding loans and $16 billion in deposits. Coinbase’s figures represent only the loans accessed through its interface rather than all activity on the protocol.
Midnight holds roughly $30 million in deposits during its initial rollout. Morpho has said the architecture may later support structured credit and lending against tokenized real-world assets, although any additional markets will depend on separate integrations.
Early use of fixed-rate markets has remained limited in some other Morpho deployments. Data from Sep. 18 showed that five Coinbase stock-backed lending markets had attracted $54,652 in USDC borrowing, all of it through variable-rate pools.
The same five stock tokens had 95 Midnight markets with different maturity dates, but none had outstanding fixed-rate loans at the time. Apple, Alphabet, Nvidia and Meta token markets were among the supported products, alongside a token tied to privately held SpaceX.
US borrowers gain another onchain credit structure
For eligible U.S. customers, Coinbase’s lending integration provides a way to access USDC while keeping bitcoin posted as collateral. Coinbase first brought the Morpho-powered model to most U.S. states in 2025, with New York excluded from the initial rollout.
When customers borrow against bitcoin, Coinbase converts the pledged asset into cbBTC and transfers it to a Morpho smart contract on Base. Coinbase describes cbBTC as an ERC-20 token backed one-for-one by bitcoin held in its custody.
The new fixed-rate structure changes the repayment conditions attached to that collateral. Existing variable loans have no fixed maturity date and can remain open while the position stays within its required collateral range. Fixed-term borrowers instead face a stated deadline, after which the lender gains the right to claim the collateral.
Collateral risk remains tied to the value of cbBTC. Morpho’s lending system uses loan-to-value limits, and positions can face liquidation if their debt rises past the permitted threshold relative to the collateral’s value. Price declines in bitcoin can therefore affect a borrower even when the interest rate itself remains fixed.
Coinbase has also built the opposite side of its onchain credit service by letting customers lend USDC through Morpho. During September, the exchange expanded USDC lending into Brazil, where eligible customers can deposit the stablecoin into a Steakhouse Financial-curated vault.
The Brazilian lending product uses variable returns generated by demand from Morpho borrowers. Coinbase said the service had attracted nearly $500 million in deposits, with users able to withdraw their USDC and accrued returns without a fixed lock-up period.
Coinbase adds loans beside stocks and IPO access
Beyond crypto lending, Coinbase has been adding securities products in selected markets. The exchange recently began providing eligible UK customers with access to almost 4,000 U.S. stocks, including fractional shares and purchases funded with pounds or USDC.
Trading is available 24 hours a day on weekdays during the phased rollout. Coinbase’s stock service gives UK users direct equity ownership, while its tokenized stock products on Base remain restricted to eligible investors outside the United States.
In the U.S., Coinbase has also opened retail IPO access through Coinbase Capital Markets, its Financial Industry Regulatory Authority-registered broker-dealer. The service started with smart-ring maker Oura’s offering and allows eligible customers to request shares before public trading begins.
Customers can submit conditional purchase offers after the expected price range becomes available. Coinbase then allocates the shares it receives from the selling group, meaning an investor may receive a full allocation, a partial allocation, or no shares when demand exceeds supply.