New Option From Crypto Giant: Borrow Without Selling Bitcoin, With Fixed Interest Upfront!
Coinbase has offered users who want to borrow USDC against Bitcoin a fixed-rate loan option. In the new product, the interest rate and repayment date are determined when the loan is taken out.
According to a report by The Block, Coinbase has begun offering this service through Morpho Midnight. This adds a separate option with the cost and term set at the outset alongside the existing variable-rate loans on the Morpho Blue infrastructure.
Users can receive USDC by posting their Bitcoin as collateral instead of selling it. The innovation is not the first time loans have been issued against Bitcoin, but the addition of a fixed interest rate and set term option to the existing borrowing service.
The rate is fixed, but there is no single rate for everyone
A Coinbase spokesperson did not share the interest rates offered through Midnight with The Block. According to the source, rates are formed through supply and demand based on offers from lenders and borrowers in the on-chain order book; they are fixed when the loan is taken out.
Morpho launched Midnight on Base in July. Coinbase manages the application experience while Morpho provides the lending protocol, and transactions are settled on the Base network.
Pay attention to the “end of month” term detail
Coinbase currently offers loans maturing at the end of the current month or the following month. According to the spokesperson, “end of month” means the last Friday of the calendar month, not the last day.
The borrower must repay the loan before the maturity date. If the loan is not repaid, the lender may claim the Bitcoin deposited as collateral. Therefore, accessing liquidity without selling Bitcoin does not mean the collateral will remain in the borrower’s possession under all circumstances.
Added alongside the existing $1.4 billion in lending activity
Coinbase’s variable-rate loans offered through Morpho Blue have more than $1.4 billion in outstanding debt and approximately $3 billion in collateral. These figures do not represent the volume of the new fixed-rate product but belong to the existing variable-rate service.
A Morpho spokesperson described Coinbase as the first major consumer platform to offer lending at scale through Midnight. According to the spokesperson, Midnight has approximately $30 million in deposits overall. Morpho Blue has $5.2 billion in outstanding loans and $16 billion in deposits across all of its integrations. These protocol-wide totals do not cover Coinbase users alone.