Borrow Against Your Bitcoin at a Fixed Rate: Coinbase Expands Morpho Loans

Coinbase is giving borrowers a new way to tap cash without selling their Bitcoin, rolling out fixed-rate loans powered by decentralized lending protocol Morpho.

The product, announced Tuesday, lets Coinbase users borrow the USDC stablecoin against their Bitcoin with the interest rate and repayment date locked in from the start.

That marks a departure from the variable-rate model that has dominated on-chain lending, where borrowing costs float with market conditions and can climb unpredictably. Now users can opt for certainty over both the cost and the duration of their loan.

The launch is the first enterprise-scale deployment of Morpho Midnight, a newer version of the protocol built to support fixed rates and defined maturities, with loans priced and executed natively on the cryptocurrency network. Coinbase controls the user experience through its app, while Morpho provides the underlying credit infrastructure and Coinbase’s Base network handles settlement.

The fixed-rate option sits alongside Coinbase’s existing variable-rate loans, which are also powered by Morpho. Coinbase first launched Bitcoin-backed borrowing on Base in early 2025, relying on Morpho as its technology provider.

That business has grown substantially, now exceeding $1.4 billion in active loans backed by roughly $3 billion in collateral, according to Morpho.

Coinbase has steadily widened the offering since launch, at one point undercutting rivals on servicing costs for U.S. borrowers and later expanding the collateral it accepts beyond Bitcoin to assets including XRP and Dogecoin.

The lending push hasn’t been without turbulence, however. A sharp drop in Bitcoin and Ethereum prices back in February drove record liquidations across Coinbase’s loan book, underscoring the risk that comes with borrowing against volatile collateral.

Fixed rates and set repayment dates are foundational to traditional credit markets, and bringing them to a platform of Coinbase’s size is a notable step for on-chain lending, which has largely run on variable rates until now.

Morpho framed the speed of the build as evidence that fintechs can layer sophisticated credit products atop open infrastructure without reconstructing the underlying stack.

While the integration begins with Bitcoin, Morpho said the protocol is designed to eventually support tokenized stocks and other real-world assets.