Tokenized Stocks Become DeFi Collateral in Morpho's Latest Move

Morpho, a protocol for decentralized finance (DeFi), has made a significant move by allowing users to pledge tokenized stocks from companies like Apple and Nvidia as collateral for USDC loans. The feature was launched on September 16, the same day Morpho went live as credit infrastructure on Arc, a new layer-1 blockchain from Circle.

The protocol's Base markets now let holders pledge Coinbase-issued tokens such as AAPLc, GOOGLc, NVDAc, METAc, and SPCXc as collateral to borrow USDC at variable rates. The feature is still in its early stages, with borrowing rising from $503 to $42,105 in just two hours on September 16.

However, the direction of travel is clear, and Morpho's move could have significant implications for DeFi users. By allowing tokenized stocks to be used as collateral, users can now raise dollars without selling their positions, which could lead to increased liquidity and efficiency in the market.