Coinbase Active Loans Through Morpho Reach About $1.7 Billion as Lending Expands
Key Facts
Active loans to Coinbase users through the Morpho protocol reached about $1.7 billion, according to the protocol's dashboard as of 19 October 2026, as the product allowing borrowing against crypto assets expanded. Collateral backing these loans totaled $3.29 billion, while the displayed borrower count reached 57.9 thousand. Total borrowing through the product stood at $3.49 billion, a separate measure from the active loan balance. Morpho said in September that outstanding variable-rate loans through its Coinbase integration had exceeded $1.4 billion. Collateral backing those loans stood at about $3 billion at the time, according to the protocol's announcement about its exchange-linked product.
In an earlier comparison, Morpho said in a post dated 6 August 2026 that the product had attracted more than $1.3 billion in outstanding USDC borrowing. It added that cbBTC collateral deposited against this borrowing totaled $2.5 billion, under the integration that began rolling out in January 2025. Coinbase chose Morpho's credit network to provide the loans rather than build its own operating infrastructure from scratch. Morpho described the choice as allowing the product to launch "without building proprietary backend systems from scratch." Coinbase customers access these loans through an interface provided by the platform, while the Morpho protocol executes the lending on the Base network, according to Coinbase's help center.
The bitcoin-backed borrowing mechanism automatically converts the asset provided by the customer into cbBTC, according to Coinbase's explanation of the product. The conversion takes place at a 1:1 ratio with no fee for the transaction, before the collateral is transferred to Morpho. Through the product, the customer receives a USDC loan against bitcoin pledged as collateral, rather than selling it to raise cash. In an update dated 29 September 2026, Coinbase announced an increase in the limit available for this type of borrowing. It said customers could now borrow up to $5 million in USDC against their bitcoin holdings.
On the loan funding side, Coinbase deposits flow into Morpho vaults whose allocations are managed by Steakhouse Financial, according to Morpho's description of the integration. These funds are allocated to the same markets from which Coinbase users borrow, channeling lenders' deposits into borrowing markets for the platform's customers. Borrowers pay interest on their USDC loan balances, according to the lending terms published in Coinbase's help center. That interest accrues in real time and is paid to lenders, whose returns come from interest paid by borrowers. Coinbase also explains that high withdrawal demand may cause lenders' withdrawals to be delayed or subject to waiting periods.
Coinbase expanded the product's options by launching fixed-rate loans powered by Morpho Midnight alongside variable-rate loans, according to Morpho's announcement. The new loans have a maturity date by which borrowers must repay, according to Coinbase's collateral terms. The platform said "fixed-rate loans may be liquidated if they are not repaid by their maturity date." This applies even when the loan-to-value ratio is healthy, making failure to repay at maturity a potential trigger for liquidation. When collateral is liquidated to cover the loan and accrued interest, the process includes an additional penalty of 4.38%, according to the product's published terms.
The expansion of Coinbase loans came amid broader growth in Morpho's activity, with the protocol announcing that total deposits exceeded $14 billion during August 2026. Morpho described this in its newsletter published in September as an all-time high for protocol-wide deposits at the time. In its subsequent newsletter published in October, it said those deposits had exceeded $15 billion in mid-September. It added that they had surpassed $17 billion at the time of writing, alongside an expansion of access channels for borrowing services. On 7 October 2026, Morpho announced the rollout of crypto loans within Ledger Wallet, making borrowing available to users who hold their assets in self-custody.