Coinbase Brings Fixed-Rate Bitcoin-Backed USDC Loans to Users
Coinbase has expanded its crypto-backed borrowing products with a new fixed-rate loan option that allows users to borrow USDC against Bitcoin while knowing their interest rate and repayment date from the beginning.
The new product is powered by Morpho Midnight, a non-custodial lending protocol designed for fixed-rate, fixed-term onchain credit. Unlike Coinbase’s existing variable-rate borrowing products, the new structure gives borrowers a defined cost and maturity before the loan begins.
The launch adds another borrowing structure to Coinbase’s growing onchain credit offering and connects the consumer-facing exchange with Morpho’s newer fixed-term lending infrastructure.
How Coinbase's Fixed-Rate Loans Work
Under the new model, users can use Bitcoin as collateral to borrow USDC. The borrowing rate and repayment date are established when the loan is originated, meaning the borrower has greater certainty about how much the credit will cost and when the outstanding amount must be repaid.
Coinbase’s existing crypto-backed loans use Morpho’s variable-rate infrastructure. Those rates can change as market conditions, liquidity and borrowing demand change. The new fixed-rate option is designed for users who instead want predictable borrowing terms.
According to Morpho’s announcement, Coinbase’s existing Morpho-powered variable-rate loans have grown to more than $1.4 billion in active loans, backed by approximately $3 billion of collateral.
The two products therefore serve different borrowing structures: variable-rate loans provide flexibility, while fixed-rate and fixed-term loans provide greater certainty over the borrowing period.
Morpho Midnight Brings Fixed-Term Credit to Base
The new Coinbase product runs on Morpho Midnight, which went live in July 2026 as a non-custodial protocol for fixed-rate and fixed-term credit.
Morpho describes Midnight as a lending system in which borrowers and lenders transact through markets with defined maturity dates. Unlike an open-ended variable-rate position, a Midnight loan has a specified term and fixed pricing structure.
The initial Midnight rollout was deliberately limited. Morpho launched the system on Base with a cbBTC/USDC market and a limited selection of maturities. This provided a controlled starting point for developing fixed-rate onchain credit before expanding to additional markets and assets.
For Coinbase users, the integration keeps the borrowing experience inside the Coinbase application while Morpho provides the underlying credit infrastructure. Base serves as the settlement network for the onchain transactions.
Coinbase's Existing Bitcoin-Backed Borrowing Market
Coinbase already offers crypto-backed borrowing through Morpho. The exchange initially introduced Bitcoin-backed USDC loans in 2025, allowing customers to access liquidity without selling their Bitcoin.
According to Coinbase’s crypto-backed loan documentation, users can borrow USDC against eligible crypto collateral, with the borrowing infrastructure provided by Morpho on Base. Coinbase says Bitcoin collateral is converted into Coinbase Wrapped BTC (cbBTC) and transferred to a Morpho smart contract where it is held as collateral.
Coinbase has subsequently expanded the service beyond Bitcoin. Its current borrowing information lists limits of up to 5 million USDC against Bitcoin, 1 million USDC against Ethereum, and up to 100,000 USDC against Solana, Cardano, XRP, Litecoin and Dogecoin, depending on the collateral supplied. Availability and limits can vary by location and eligibility.
The fixed-rate launch therefore represents an expansion of the existing lending infrastructure rather than a completely separate borrowing system.
Why Fixed Rates Matter for Onchain Borrowing
Most onchain borrowing has historically relied on variable interest rates. Those rates can respond to supply and demand, potentially changing during the life of a loan.
A fixed-rate structure changes that dynamic by establishing the borrowing cost and maturity in advance. Borrowers can therefore know the basic repayment structure before taking the loan, which can make planning easier for users who prefer defined credit terms.
Morpho has positioned Midnight as a complementary market structure to Morpho Blue. Blue focuses on variable-rate, open-term lending, while Midnight is designed around fixed-rate, fixed-term credit. Morpho says both systems are intended to serve different borrowing and lending requirements.
The broader goal is to bring characteristics familiar from traditional credit markets into onchain lending while retaining blockchain-based settlement and transparency.
Bitcoin-Backed Credit Market Continues to Expand
The launch comes as Bitcoin-backed credit develops beyond conventional crypto lending products. The Bitcoin Digital Credit Report, produced by Apyx and BitcoinTreasuries.net, estimates a potential $130 billion addressable market by 2030 for Bitcoin-backed preferred equity. That estimate concerns preferred-equity financing rather than Coinbase’s loan product, so it should not be treated as a direct forecast for Bitcoin-backed lending.
The supplied source also cited research involving 1,244 cryptocurrency holders in the United States and Australia, surveyed by Protocol Theory between February and March 2026. It reported that 88% of respondents said they would consider taking a crypto-backed loan or credit product.
Together, these figures point to interest in using digital assets as collateral rather than necessarily selling them. Coinbase’s latest product gives users another structure for doing that, this time with a defined interest rate and repayment date.
Coinbase and Morpho Expand Onchain Credit
The partnership between Coinbase and Morpho has evolved from variable-rate crypto-backed loans into a broader credit offering. Morpho’s infrastructure now supports both open-ended variable-rate borrowing and fixed-rate, fixed-term markets through Midnight.
For Coinbase, the fixed-rate launch adds another credit option within its consumer platform. For Morpho, it represents the first enterprise-scale integration of Midnight and an effort to bring fixed-term onchain credit to a larger user base.
The initial offering is focused on Bitcoin-backed USDC borrowing on Base. As Morpho Midnight develops, its architecture is designed to support additional collateral types, including tokenized stocks and other tokenized real-world assets.
The key change for Coinbase users is straightforward: instead of relying only on a borrowing rate that can move with market conditions, eligible users now have access to a structure where the rate and repayment date are fixed from the outset.
