src=”https://www.tbstat.com/cdn-cgi/image/f=avif,q=50/wp/uploads/2023/10/20231006_Coinbase_News3-1200×675.jpg” alt=”Coinbase expands USDC borrowing to UK, allowing loans against bitcoin, ether”>
Coinbase has expanded its cryptocurrency-backed lending service to the United Kingdom, enabling users to borrow up to $5 million in USD Coin (USDC) against other digital assets. The service operates through Morpho on the Base Layer 2 blockchain, with loans requiring overcollateralization and typically settling in under a minute. This move marks a significant step in the company’s strategy to offer traditional financial services within the digital asset ecosystem.
Key Takeaways
- Coinbase has launched a USDC borrowing service in the UK, allowing users to obtain loans against Bitcoin, Ether, and cbETH.
- Loans are facilitated via Morpho on the Base blockchain, ensuring rapid settlement and dynamic interest rate adjustments.
- The service supports borrowing amounts up to $5 million, with loans overcollateralized by supported crypto assets.
- This expansion follows a similar launch in the U.S. and indicates Coinbase’s intent to broaden its lending offerings internationally.
The newly introduced UK service allows users to pledge Bitcoin, Ether, and Coinbase Wrapped Staked Ether (cbETH) as collateral. These assets are transferred on-chain into a Morpho smart contract and remain there until the loan is fully repaid. Users can access the borrowing feature through the “Borrow” section within the Coinbase application. By selecting a collateral asset and specifying the desired USDC loan amount, users can initiate the process. Morpho then disburses the USDC directly to the user’s Coinbase account, which can subsequently be converted to British Pounds or transferred externally.
Interest rates for these loans are variable and are automatically calculated by Morpho based on prevailing market conditions. The exchange noted that these rates are subject to change with every block creation on the Base L2 blockchain, offering a dynamic pricing model. There is no fixed repayment schedule, providing borrowers with flexibility to repay their loans at any point. The platform includes an automated liquidation mechanism, which is triggered when the outstanding loan amount, including accrued interest, reaches a predetermined threshold relative to the collateral’s market value. Borrowers will receive automated alerts via email and text message in the event of a liquidation.
This UK rollout mirrors Coinbase’s January 2025 launch of on-chain crypto-backed loans in the United States, also facilitated by Morpho. The initial U.S. offering provided access to loans of up to $100,000 in USDC (now expanded to $5 million) using Bitcoin as collateral. The U.S. service was initially available across most states, with an exclusion for New York. Since its inception, the collateral options in the U.S. have expanded to include Ether, XRP, Dogecoin, Cardano, and Litecoin.
Coinbase reported that total loan originations through its U.S. product on Morpho reached over $2.17 billion in USDC as of April 14, 2026. The company has expressed its intention to extend the availability of its crypto-backed lending services to additional global markets in the near future, signaling a strategic push into international financial services for its user base.
Regulatory Precedents and Global Frameworks
The expansion of Coinbase’s lending services, particularly its operation in the UK and its reliance on on-chain protocols like Morpho, highlights the evolving intersection of cryptocurrency platforms and regulatory oversight. While the U.S. has seen significant enforcement actions from the Securities and Exchange Commission (SEC) concerning lending products, the UK’s approach and the implementation of services built on decentralized protocols present a different compliance landscape. The seamless integration with Base, an Ethereum Layer 2 network, suggests a move towards more decentralized and automated financial products. The legal stakes for Coinbase revolve around ensuring these lending activities comply with existing financial regulations in each jurisdiction, including consumer protection laws, anti-money laundering (AML) requirements, and capital adequacy. The collateralization and overcollateralization mechanisms, coupled with automated liquidation, aim to mitigate financial risk for the platform, but regulatory scrutiny will likely focus on the transparency of these processes and the classification of the underlying assets and the loan products themselves.
Information compiled from materials : www.theblock.co