Access to liquidity without selling digital assets is becoming a core focus for crypto platforms, as firms expand beyond trading into broader financial services.
Coinbase has introduced crypto-backed loans in the United Kingdom, allowing eligible users to borrow against their digital holdings instead of liquidating them.
The product enables users to secure loans in USD coin by pledging assets such as Bitcoin, Ethereum, and Coinbase Wrapped Staked Ether (cbETH) as collateral. Once locked, the borrowed USDC is credited directly to the user’s account, providing immediate access to funds while maintaining exposure to the underlying assets.
The loans are powered by Morpho, a decentralised lending protocol operating on Base, Coinbase’s layer-2 network. While users interact through Coinbase’s interface, the lending process itself is executed on-chain, combining a familiar user experience with decentralised infrastructure.
The structure follows an overcollateralised model, meaning borrowers must deposit more value than they take out. Loan-to-value ratios can reach up to around 75%, with automatic liquidation triggered if the value of the collateral falls too close to the loan threshold.
There are no fixed repayment timelines. Interest accrues at variable rates, and borrowers can repay at any time, offering flexibility for users seeking short-term liquidity without exiting long-term positions.
The UK introduction builds on Coinbase’s earlier deployment of similar products in the United States, where demand for crypto-backed lending has grown steadily. The expansion also comes as UK regulators continue to refine their approach to digital asset services, particularly around lending and consumer protection.
For Coinbase, this reflects a wider strategy to position itself as a full-service financial platform. By centering the product around USDC, the company is also strengthening the role of stablecoins as a bridge between crypto markets and traditional finance.
The development points to a wider industry direction. Digital assets are increasingly being used not just for trading, but as collateral within financial systems. The long-term success of such products will depend on how well platforms manage volatility risks while operating within evolving regulatory frameworks.
Read also: Artificial Intelligence explained: what is it and why it matters in 2026?