Coinbase Launches ETH-Backed Loans Amid Onchain Lending Growth

Coinbase has launched Ether-backed loans for US users, allowing customers to borrow USDC against their ETH holdings without the need to sell. This offering is powered by Morpho and operates on the Base platform.

According to the report from Cointelegraph, the product is available across most US states, with the exception of New York. Users can access variable rates and must be aware of the liquidation risks that depend on market conditions.

Customers are permitted to borrow up to one million USDC, a stablecoin pegged to the US dollar. Furthermore, Coinbase plans to expand this program to include loans backed by staked Ether, known as cbETH.

The collaboration with Morpho is significant, as Coinbase integrated this decentralized finance lending protocol into its app in September, which previously offered users yields of up to ten point eight percent on their USDC holdings.

The report highlights that Coinbase's onchain lending markets have processed over one point twenty-five billion dollars in loan originations, supported by approximately one point thirty-seven billion dollars in deposited collateral.

Currently, around eight hundred ten million dollars in loans remain outstanding, with over thirteen thousand five hundred wallets holding active borrow positions. In a broader context, sources indicate that Coinbase's rapid expansion has been influenced by the pro-crypto regulatory landscape established during the Trump administration, particularly following the GENIUS Act, which introduced clear stablecoin regulations in July.

This has allowed Coinbase to roll out new products and partnerships, including the acquisition of Echo for three hundred seventy-five million dollars in October. Echo, developed by crypto investor Jordan Fish, is designed to enable communities to fund early-stage projects and startups.

Additionally, Coinbase has announced new crypto staking options for New York residents and partnered with Citigroup to enhance transactions between crypto and traditional currencies. Notably, Coinbase also unveiled a new platform for initial coin offerings in November, restoring regulated access to initial token sales for US retail investors for the first time since 2018, with plans to list roughly one sale per month.

The first sale will feature the Monad token on the upcoming Monday. Furthermore, tech researcher Jane Manchun Wong reported that Coinbase is developing a prediction market website, seemingly backed by Kalshi.

This growth in Coinbase's offerings reflects the increasing integration of decentralized finance into the banking ecosystem, potentially reshaping traditional banking practices.