Coinbase has launched crypto-backed USDC loans in the United Kingdom with borrowing limits up to $5 million. The expansion marks a significant increase from its earlier U.S. cap and signals growing demand for onchain credit products.
The service allows users to borrow USD Coin (USDC) against bitcoin (BTC), ether (ETH), and Coinbase wrapped staked ether (cbETH). Loans are issued through Morpho on Base, Coinbase’s Layer 2 network, with collateral locked in smart contracts until repayment. Funds are disbursed within seconds and can be converted into British pounds or transferred externally.
Can Onchain Lending Scale Beyond The U.S. Market?
The UK rollout follows Coinbase’s U.S. launch in January 2025, where initial borrowing limits were set at $100,000 before being raised. Total loan originations in the U.S. have exceeded $2.17 billion in USDC as of April 14, 2026, according to the company. Compared with traditional lending, these products offer faster settlement but require overcollateralization to manage risk.
Interest rates are variable and adjust continuously based on market conditions via Morpho’s protocol logic. Borrowers are not bound by fixed repayment schedules, but liquidation occurs if collateral value falls below required thresholds relative to outstanding debt. Users receive automated alerts to manage positions before liquidation triggers.
The model reflects broader growth in decentralized finance (DeFi), where lending protocols increasingly integrate with centralized platforms to expand access. But, regulatory frameworks in the UK and other jurisdictions may shape how quickly such products gain traction beyond crypto-native users.
The next catalyst will be Coinbase’s planned expansion into additional markets, as regulators and institutions assess the viability of large-scale crypto-backed lending outside the United States.
