TL;DR:
Coinbase is gradually introducing Bitcoin-backed loans, allowing users to borrow USDC without selling their BTC. You’ll be able to borrow instantly at competitive interest rates and repay whenever you choose — no strict timelines.
These crypto-backed loans are powered by Morpho, a decentralized lending protocol on Base. Initially, loans will only be available in the U.S. (excluding New York), with plans to support more cryptocurrencies and expand globally in the future.
Get a Loan Using Bitcoin as Collateral Without Selling It
As of April 30, 2025, Coinbase users across most of the United States can now borrow up to $1 million in USDC (a stablecoin pegged 1:1 to the U.S. dollar) using their Bitcoin as collateral.
This means you don’t have to sell your BTC if you need cash for big expenses like a car purchase or mortgage down payment. Even better — selling your Bitcoin could trigger a taxable event, while borrowing against it helps you defer capital gains taxes.
This new feature offers a fast, secure, and tax-friendly way to get liquidity while keeping your long-term crypto holdings intact. The loans are powered by Morpho, a decentralized lending protocol built on Base, Coinbase’s layer-2 blockchain network. You benefit from open, onchain lending markets and interest rates determined in real-time by Morpho’s decentralized market.
Simple, Fast, and Flexible Borrowing Experience
Getting a loan on Coinbase is now incredibly fast — it takes less than a minute to borrow USDC using your Bitcoin as collateral. Once the loan is approved, you can earn more than 4% APY in USDC rewards, send USDC across the world for free, and use it in the broader crypto ecosystem.
You can also convert your USDC to regular USD (1:1) without any fee, making it ideal for covering everyday or large expenses.
This new loan feature helps users access financial flexibility without choosing between spending today and investing in the future.
Onchain Finance: The Future of Money Management
With the launch of crypto-backed loans, Coinbase is empowering users with more control over their money. These loans are part of a broader vision to make onchain finance the standard for personal money management.
By combining Coinbase’s user-friendly platform with advanced decentralized technologies, customers get access to more transparent, flexible, and secure financial services.
Thanks to Coinbase Wrapped Bitcoin (cbBTC) — introduced in September 2024 — users can now put their Bitcoin to work onchain without ever leaving Coinbase. When you apply for a USDC loan, your
Bitcoin is automatically converted to cbBTC (at a 1:1 ratio for free) and sent to Morpho as collateral. You continue benefiting from the security and decentralization of onchain finance, while enjoying seamless access and usability on Coinbase.
How to Get Started With Bitcoin-Backed Loans
Borrowing USDC using Bitcoin on Coinbase is quick and easy:
- Open the Coinbase app.
- Go to the Cash tab.
- Tap on Borrow.
- Enter the amount of USDC you want to borrow based on how much BTC you can use as collateral.
Currently, you can borrow up to $100,000 in USDC, depending on your BTC holdings. Support for higher amounts — up to $1M — is also available in many cases. While the feature is starting on mobile, Coinbase plans to add web browser support soon.
Once you confirm the loan:
- Your pledged BTC is instantly wrapped into cbBTC (1:1) at no cost.
- cbBTC is transferred to a Morpho smart contract on Base.
- Your loaned USDC appears in your Coinbase account within seconds.
How Interest and Repayment Works
- Interest rates are variable and constantly updated based on real-time market conditions.
- Interest is calculated every few seconds with each new block on the Base blockchain.
- There’s no fixed repayment schedule — you can repay as much or as little as you want, whenever you want.
However, keep an eye on your loan-to-value (LTV) ratio. If the total value of your loan and interest gets too close to your collateral value, your BTC may be liquidated to cover the loan. You can track everything, including interest and LTV, directly in the Coinbase app.
The Broader Utility of USDC
USDC is more than just a stablecoin — it’s a powerful financial tool:
- You can earn rewards on your USDC balance.
- You can send USDC globally with zero fees (except on Ethereum).
- You can convert USDC to USD 1:1 instantly and without commission.
- USDC works natively across 10 blockchains including Ethereum, Base, Solana, Arbitrum, and Polygon.
Note that transfer limits are in place for security reasons, and some features like USD conversion may vary by region.
Disclaimer & Important Notes
- These crypto-backed loans are not investment products and don’t constitute securities or investment advice.
- Coinbase does not charge commission fees for USDC conversions, but third-party processing fees may still apply.
- USDC reward rates may change over time, and regional access to certain features may vary.
- Always consult a tax or financial advisor before making investment decisions involving digital assets.
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