Coinbase Introduces Fixed-Rate Bitcoin-Backed USDC Loans

Coinbase has introduced fixed-rate Bitcoin-backed USDC loans for its users. The new feature uses Morpho Midnight, a decentralized lending protocol that settles transactions on Coinbase's Ethereum layer 2 network Base.

This marks a shift from Coinbase's existing variable-rate model, where rates change based on demand and supply conditions. The fixed-rate option gives users greater certainty over the cost and duration of their borrowing.

Coinbase's existing floating-rate loans have more than $1.4 billion in active loans backed by nearly $3 billion of collateral. The new fixed-rate offering is a significant development, as it allows users to borrow USDC against their Bitcoin holdings with no surprises on interest payments.

Morpho's co-founder and CEO Paul Frambot said that Morpho and Coinbase's joint products have been successful, and now they are focusing on scaling those. He emphasized the growth of the Bitcoin-backed credit market, which is expected to reach $130 billion by 2030.