Coinbase Launches Fixed-Rate USDC Loans Secured by Bitcoin

Nasdaq-listed exchange Coinbase now allows its users to borrow dollar-pegged stablecoin USDC against their Bitcoin holdings with a fixed interest rate, eliminating uncertainty around borrowing costs.

The exchange has rolled out fixed-rate, Bitcoin-backed USDC loans, with the interest rate and repayment date set at the time of borrowing. This provides an alternative to the floating-rate loans Coinbase already offers.

“The move takes onchain borrowing beyond the predominantly variable-rate model, giving users greater certainty over the cost and duration of their borrowing,” according to an announcement on Tuesday.

The fixed-rate offering runs on Morpho Midnight, a decentralized, non-custodial lending protocol for fixed-rate and fixed-term crypto loans launched in July this year. It settles transactions on Coinbase’s Ethereum layer 2 network, Base.

It marks a meaningful shift from how Coinbase’s lending has worked until now. Its existing loans run on the Morpho Blue protocol, where rates fluctuate based on demand and supply conditions and can climb when borrowing demand spikes. The new fixed-rate option sits alongside this floating-rate offering, which has more than $1.4 billion in active loans backed by nearly $3 billion of collateral.

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