Coinbase users can now borrow USDC against Bitcoin at a fixed rate

Nasdaq-listed exchange Coinbase now allows its users to borrow dollar-pegged stablecoin USDC against their Bitcoin holdings with no surprises on what they’ll pay in interest.

The exchange has rolled out fixed-rate, bitcoin-backed USDC loans, with the interest rate and repayment date set at the time of borrowing, an alternative to the floating-rate loans Coinbase already offers.

“The move takes onchain borrowing beyond the predominantly variable-rate model, giving users greater certainty over the cost and duration of their borrowing,” according to an announcement on Tuesday.

The fixed-rate offering runs on Morpho Midnight, a decentralized, non-custodial lending protocol for fixed-rate and fixed-term crypto loans launched in July this year. It settles transactions on Coinbase’s Ethereum layer 2 network Base.

It marks a meaningful shift from how Coinbase’s lending has worked until now. It’s existing loans run on the Morpho Blue protocol, where rates change, determined by demand and supply conditions and can climb when borrowing demand spikes. The new fixed-rate option sits alongside this floating one, which has more than $1.4 billion in active loans backed by nearly $3 billion of collateral.

Fixed-rate bitcoin-backed loans aren’t new, with lenders like Ledn and SATL Lending offering them for years. What Coinbase has done stands out because it runs onchain, through a DeFi app and inside a mainstream consumer app.

Morpho’s co-founder and CEO Paul Frambot said that Morpho and Coinbase’s joint products have been immensely successful and now they are focusing on scaling those.

“We’re now building on that foundation and starting to scale: new loan types and use cases, bringing onchain credit one step closer to the scale and diversity of global credit markets,” he said on X.

The Bitcoin-backed credit market is currently sized at roughly $16 billion, according to the Bitcoin Digital Credit Report compiled by Apyx and BitcoinTreasuries.net. Per some estimates, it is expected to grow to $130 billion by 2030 as preferred equity structures scale.

There is interest among holders to put their BTC to use. Early this year, Protocol Theory surveyed 1,244 cryptocurrency holders across the U.S. and Australia between February and March 2026 and found that 88% of respondents said they would consider taking out a crypto-backed loan or credit product.