Coinbase (Nasdaq: COIN) announced on April 30 via X that its bitcoin-backed loan service is now fully available to eligible customers across the United States, excluding New York. Users can borrow up to $1 million in USDC against their bitcoin holdings without selling the underlying asset.
How It Works: Avoid Taxable Events
According to Coinbase, “As of April 30, 2025, customers can borrow up to $1M in USDC against their bitcoin to cover any of life’s expenses without selling their bitcoin.” The product launched in January and has seen rapid adoption. Coinbase revealed that $100 million USDC was borrowed in less than 100 days, with rates as low as 5% — significantly cheaper than other crypto-backed loan options — and no hidden fees.
When a loan is initiated, the user’s bitcoin is automatically converted to cbBTC (Coinbase’s wrapped version of bitcoin) and deposited into Morpho, a decentralized lending protocol built on Base, Coinbase’s Ethereum layer-2 network. Funds are disbursed in USDC nearly instantly, and repayment terms remain open-ended with no fixed schedule.
Dynamic Rates and Market Demand
Interest rates are dynamic, tied to Morpho protocol’s market conditions. Users can access the loan seamlessly through the Coinbase app. The service is designed for flexibility: “Whether you want to make a large purchase or cover unexpected expenses, BTC-backed loans give you instant access to the cash you need. Without having to sell your bitcoin.” However, New York residents are excluded due to regulatory barriers.
Global Rollout on the Horizon
Coinbase stated: “We’re also planning to expand BTC-backed loans to more countries.” This signals the exchange’s continued investment in decentralized financial infrastructure, integrating onchain lending into its core product suite. As global regulatory clarity improves, Coinbase is poised to bring bitcoin-backed lending to additional jurisdictions, further enabling financial innovation.
Industry Implications
Bitcoin-backed loans offer HODLers a way to unlock liquidity without triggering taxable events, a major advantage over selling. Compared to traditional crypto lending platforms, Coinbase leverages its regulatory compliance and Morpho’s onchain efficiency to deliver a low-cost, high-liquidity alternative. The planned international expansion could reshape the crypto lending landscape if executed smoothly.