Coinbase has crossed a major milestone in its lending business, surpassing $1 billion in bitcoin-backed onchain loan originations just eight months after the service launched in January.
The program, powered by decentralized finance (DeFi) protocol Morpho—a Coinbase Ventures portfolio company—allows users to borrow stablecoin USDC against their bitcoin holdings without selling their crypto. Originally capped at $100,000 per borrower, the service quickly expanded as demand surged. By April, the limit rose to $1 million, and Coinbase now plans to raise it again to $5 million per loan in the coming months.
The onchain economy is growing, so we’re growing with it.
— Coinbase 🛡️ (@coinbase) September 30, 2025
Loan limits are increasing - get up to $5M in USDC against your bitcoin. Rolling out soon.
“Next goal: $100B in onchain borrow originations,” Coinbase CEO Brian Armstrong posted on X, highlighting what he described as hockey stick-style growth in adoption. Coinbase emphasized that the expansion aligns with the broader rise of the onchain economy.
Next goal: $100B in onchain borrow originations.
— Brian Armstrong (@brian_armstrong) September 30, 2025
These adoption charts are what every product manager wants to see: hockey stick growth. The onchain economy is thriving.
Proud of the team for making DeFi more accessible and easier to use. https://t.co/LgqfOacPWQ
How Coinbase’s Onchain Loans Work
When a customer chooses to take out a bitcoin-backed loan, their BTC is wrapped 1:1 into Coinbase-wrapped Bitcoin (cbBTC) at no cost and transferred to Morpho. From there, Morpho disburses USDC to the customer’s Coinbase account.
Loans are over-collateralized, requiring at least a 133% collateral ratio, though borrowers can set higher loan-to-value thresholds. If the debt balance reaches 86% of the collateral’s value, the position is liquidated to cover repayment and penalties. Interest rates adjust automatically with each block on Coinbase’s Ethereum Layer 2 network, Base.
The loans have no fixed terms—borrowers can repay at any time as long as collateral requirements are met. Currently, only bitcoin is supported as collateral, but Coinbase has indicated that more crypto assets may be added in the future. The service is available to U.S. customers, excluding New York residents.
From Past Challenges to New Growth
Coinbase previously offered a bitcoin-backed loan program for retail customers but shut it down in November 2023 amid regulatory challenges with the U.S. Securities and Exchange Commission. The new model is structured differently: Coinbase provides the interface, while Morpho manages the underlying lending mechanics.
In addition to its bitcoin-collateralized loans, Coinbase recently introduced an option for customers to lend USDC onchain with yields of up to 10.8%, expanding its suite of DeFi-powered financial products.
