Coinbase offers crypto loans for Bitcoin holders
The service allows users to borrow USDC against their Bitcoin, leveraging cbBTC as collateral, and simplifies the process with a user-friendly interface.
Coinbase has reintroduced crypto-backed loans, allowing US customers to borrow against their Bitcoin. The service, currently unavailable in New York, uses the decentralised finance (DeFi) protocol Morpho to handle lending operations. Customers can borrow USDC while Coinbase facilitates the process, removing the need to interact directly with complex DeFi systems.
The new programme marks a significant step in bridging traditional crypto exchanges with the DeFi world. By integrating a sleek, consumer-friendly interface, Coinbase makes over-collateralised loans more accessible, concealing the intricate mechanics of DeFi from users. The loans use cbBTC, a DeFi-compatible version of Bitcoin issued by Coinbase, as collateral.
The move follows the discontinuation of Coinbase’s previous loan offering in 2023 after regulatory challenges and waning demand. With this streamlined approach, Coinbase hopes to attract more users to DeFi lending, tapping into the billions of dollars worth of Bitcoin held by its customers.