Coinbase Launches Bitcoin-Backed Loans for US Users – Coinbase Glb (NASDAQ:COIN)

Crypto exchange Coinbase currency Launched a new service that allows US customers (except New York State) to borrow USD/USD against they Bitcoin Collectibles.

This new offering allows users to access liquidity without selling their Bitcoin, providing instant loans with flexible repayment terms and competitive interest rates backed by… Morphoan open source lending protocol on Coinbase’s Layer-2 Blockchain.

Loans are disbursed instantly in USDC, offering flexible repayment options and competitive interest rates dynamically determined by Morpho’s open market lending pool.

“Getting a Bitcoin-backed loan on Coinbase is now easier and faster than ever. In less than a minute, you can get a USDC loan without having to sell your Bitcoin at all.

This development aims to bridge the gap between holding crypto assets for the future and accessing funds for immediate needs.

When a user borrows USDC against their Bitcoin, the collateral is automatically transferred to Coinbase Wrapped Bitcoin (cbBTC) on a 1:1 basis and transferred to the Morpho protocol.

cbBTC, which launched in September to allow customers to move and use Bitcoin on-chain, remains within the Coinbase ecosystem while being used as collateral.

Read also: Bitcoin consolidates at around $99,000 after $750 million inflows from ETFs on Wednesday

Users can borrow up to $100,000 USD, depending on the amount of Bitcoin they pledge as collateral.

Interest rates are variable and are adjusted in real-time by Morpho based on market conditions, and change dynamically with each block creation on the underlying blockchain.

The loan terms offer users repayment flexibility, with no fixed repayment schedule, while users can monitor the status of their loan via the Coinbase app.

Users will be subject to liquidation if the loan amount, including accrued interest, reaches a predetermined level compared to the value of their collateral.

Coinbase emphasizes the benefits of borrowing against bitcoin rather than selling it, citing the potential tax advantages in delaying capital gains or losses.

The launch of these bitcoin-backed loans represents another step in Coinbase’s efforts to empower customers with “greater control over their financial lives,” according to Coinbase.

By combining the accessibility of Coinbase with the transparent, decentralized features of on-chain protocols, the company aims to provide “dramatically improved financial services.”

Read next:

Image: Shutterstock