Coinbase expanded its onchain lending product to accept XRP, Dogecoin, Cardano, and Litecoin as collateral. The move broadens access to USDC liquidity without requiring investors to sell spot holdings.
Eligible U.S. customers, excluding New York residents, can now borrow up to $100,000 in USDC against the four tokens. The loans are facilitated through the Morpho decentralized finance (DeFi) protocol on Base, with Coinbase providing the user interface. Coinbase charges a one-time fee per borrowing action, added to the principal, and loans have no fixed repayment schedule if borrowers maintain required loan-to-value ratios.
Does Expanded Collateral Deepen Onchain Credit Markets?
Borrowers can draw up to 75% loan-to-value (LTV), with liquidation triggered at 86%, according to Coinbase’s terms. Interest rates are variable and determined by supply and demand on Morpho. The company previously supported borrowing up to $5 million in USDC against bitcoin and $1 million against ether, and says the product has generated more than $1.9 billion in loan originations to date.
“No matter what you're holding, you should be able to leverage your crypto without having to sell,” said Jacob Frantz, product lead at Coinbase.
He described the expansion as a preview of a financial system where tokenized assets can be used more flexibly within lending markets. But will retail borrowers understand the liquidation mechanics tied to volatile collateral?
Loan proceeds cannot be used for trading on Coinbase under the product’s terms. The structure effectively routes centralized exchange users into DeFi-native credit markets while preserving custody-linked risk controls and compliance requirements. Broader international availability is planned, though no timeline was disclosed.
The expansion signals continued convergence between centralized platforms and onchain liquidity venues. The next catalyst will be whether borrowing volumes rise materially as altcoin holders test credit demand beyond bitcoin and ether-backed positions.
