Coinbase Launches Fixed-Rate Bitcoin-Backed Loans for USDC
Coinbase introduces fixed-rate loans for bitcoin holders
Coinbase, a popular cryptocurrency exchange, has launched a new service that allows users to borrow USDC using their bitcoin as collateral. USDC is a stablecoin, a type of digital currency designed to maintain a steady value equal to the U.S. dollar. Unlike traditional crypto loans where interest rates can change frequently, this new product offers a fixed interest rate.
When a user takes out one of these loans, both the interest rate and the repayment date are locked in at the start. This gives borrowers more certainty about how much they will owe and when they need to pay it back. The service is aimed at users who want to avoid the surprises often found in variable-rate lending models.
Important features of the new loan service
- Loans come with a fixed interest rate and a set date for repayment.
- The system uses Morpho Midnight, which is a decentralized lending protocol.
- All transactions are settled on Base, a layer 2 network that makes Ethereum transactions faster and more efficient.
- The product is an alternative to Coinbase’s existing variable-rate lending business.
How the technology works
The fixed-rate loans are powered by Morpho Midnight, a non-custodial lending protocol. This means the system is designed to work without a central authority holding onto the users' funds directly during the process. The product operates on Base, which is Coinbase's own network built on top of the Ethereum blockchain.
This new option joins Coinbase's existing lending business, which uses the Morpho Blue protocol. In the variable-rate model, interest rates can rise or fall based on how many people want to borrow at any given time. Currently, Coinbase has more than $1.4 billion in active variable-rate loans, backed by nearly $3 billion in collateral.
Growing demand for crypto-backed credit
There is significant interest among digital asset holders in using their bitcoin for credit. A survey conducted earlier in 2026 found that 88% of cryptocurrency holders in the U.S. and Australia would consider using a crypto-backed loan product. The total market for bitcoin-backed credit is currently estimated to be around $16 billion.
Industry reports suggest this market could grow to $130 billion by the year 2030. While other companies have offered fixed-rate bitcoin loans for several years, Coinbase's version is notable because it is integrated directly into a mainstream consumer application and runs on decentralized finance (DeFi) technology.
Why fixed rates matter for borrowers
Fixed-rate loans provide more stability for people who need to borrow money against their assets. In many crypto lending systems, the cost of borrowing can spike suddenly if demand increases. By setting the cost and duration at the beginning, Coinbase aims to bring onchain credit closer to the standards of traditional global credit markets.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.