Coinbase has launched fixed-rate loans powered by Morpho, allowing users to borrow USDC against Bitcoin with locked interest rates and repayment dates from the start.
This marks the first enterprise-scale deployment of Morpho Midnight, with Coinbase managing the app experience, Morpho providing credit infrastructure, and Base handling settlement.
The new option integrates with Coinbase’s existing Morpho-powered variable-rate loans, which currently support over $1.4 billion in active loans backed by approximately $3 billion in collateral.
Coinbase is introducing a groundbreaking option for its users: fixed-rate borrowing against Bitcoin. By partnering with the decentralized lending protocol Morpho, Coinbase is offering a new way to tap liquidity without selling cryptocurrency holdings, featuring predictable interest rates and defined repayment terms.
Announced Tuesday, the product allows Coinbase users to borrow the USDC stablecoin using Bitcoin as collateral. Crucially, the interest rate and repayment date are locked in from the outset, offering a level of financial certainty previously rare in the volatile world of on-chain lending.
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This launch represents a significant departure from the variable-rate models that have historically dominated decentralized finance (DeFi). In traditional on-chain lending, borrowing costs fluctuate dynamically with market supply and demand, often leading to unpredictable spikes. By offering fixed rates and set maturities, Coinbase is aligning crypto-backed borrowing closer to the predictable structures of traditional credit markets.
The initiative is the first enterprise-scale deployment of Morpho Midnight, an advanced iteration of the Morpho protocol tailored for fixed-rate, fixed-term lending. In this tripartite setup, Coinbase manages the front-end user experience, Morpho provides the robust underlying credit infrastructure, and Coinbase’s Base layer-2 network handles the final settlement.
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The fixed-rate product launches alongside Coinbase’s existing variable-rate loans, also powered by Morpho. That existing credit line has expanded dramatically since its debut in early 2025, surpassing $1.4 billion in active loans backed by roughly $3 billion in collateral. Since launch, Coinbase has broadened its collateral options and at one point offered highly competitive servicing costs for U.S. borrowers.
However, the aggressive expansion into crypto-backed lending has faced headwinds. A severe market downturn in February led to record liquidations within Coinbase’s loan portfolio, highlighting the inherent risks of utilizing highly volatile digital assets as collateral. The introduction of fixed-rate terms aims to mitigate some of this volatility for borrowers seeking stability.
Morpho highlighted the rapid development of the integration as a testament to how fintech platforms can build sophisticated financial products on top of open, decentralized credit infrastructure without needing to rebuild the underlying technology. While the initial integration is limited to Bitcoin, the protocol is structurally designed to eventually accommodate tokenized stocks and other real-world assets.
