Coinbase has introduced a new lending option that lets eligible users borrow against their Ethereum (ETH), expanding its role in the fast-growing onchain credit market, which recently surpassed $1.25 billion. The product blends USDC credit lines with access to decentralized liquidity protocols, reflecting Coinbase’s ongoing push to merge the strengths of CeFi and DeFi into a single user experience.
ETH-backed lending expands Coinbase’s presence in onchain credit
Coinbase now allows qualified users to borrow USDC using ETH as collateral, with limits of up to $1 million per user. The structure mirrors the company’s earlier Bitcoin-backed lending product: borrowers can access up to 75% LTV, while liquidations are triggered at 86%. Interest rates remain variable and respond directly to supply and demand, and Coinbase emphasizes that the service includes “no hidden fees” and offers full flexibility on repayment without fixed terms.
If you believe in somΞTHing, this one's for you.
ETH-backed loans are here.
You can borrow USDC against your Ethereum, unlocking liquidity without selling.
Available now in the U.S. (ex. NY). pic.twitter.com/eOvJ2BWPfr
— Coinbase 🛡️ (@coinbase) November 20, 2025
To support the new ETH–USDC credit line, Coinbase relies on Morpho’s onchain infrastructure to originate loans and optimize rates. This partnership has already driven more than $1 billion in BTC-backed originations through Morpho. The company also provides an onchain USDC deposit product offering yields of up to 10.8% APY in eligible jurisdictions —available in markets such as Bermuda, Hong Kong, the UAE, New Zealand, the Philippines and Taiwan, though not in New York. Additionally, Coinbase has increased institutional BTC lending limits to $5 million per entity.
The launch arrives at a moment of rapid growth for onchain credit. Total active lending volume stands at $1.25 billion, and industry data shows the broader crypto lending sector reached highs of $73.6 billion in Q3 2025, driven primarily by DeFi expansion. The rise of tokenized real-world assets (RWA) and protocols like Morpho is deepening liquidity, while institutional channels continue to explore stablecoin-based credit strategies.
For treasuries and traders, the new loan program brings both opportunities and risks: access to liquidity without selling ETH, exposure to LTV changes during volatile markets, potential liquidation events, and reliance on interest rates that can rise as demand grows. Morpho integration may help improve execution quality and cost efficiency, but it also introduces added operational complexity by blending permissionless components with centralized custody frameworks.
Coinbase’s latest move reinforces its hybrid approach, combining centralized infrastructure with permissionless liquidity to broaden USDC credit options collateralized by ETH. For institutional users and treasury managers, the focus will now shift toward monitoring loan demand, rate behavior, and the stability of originations over the coming quarters.