Coinbase has rolled out its USDC borrowing product to users in the United Kingdom, allowing them to borrow the dollar-pegged stablecoin against their Bitcoin and Ethereum holdings without selling their crypto. The move is the exchange’s first international expansion of a product that has already attracted more than $2 billion in loan originations since launching in the US roughly 15 months ago.
The feature, which the company says can be completed in under a minute, is powered by Morpho, an onchain lending protocol built on Base, Coinbase’s own Ethereum Layer 2 network. When a user opts to borrow against Bitcoin, their BTC is converted into Coinbase Wrapped Bitcoin (cbBTC) and transferred to a Morpho smart contract, which then holds it as collateral.
The USDC loan appears in the user’s Coinbase account within seconds. Borrowed funds can be sent globally for free, converted to British pounds, or used however the borrower sees fit. There are no fixed repayment schedules or monthly payment obligations.
UK users can borrow up to $5 million in USDC against Bitcoin and up to $1 million against Ethereum or cbETH, Coinbase’s tokenized representation of staked ether. Coinbase One members also earn up to 3.5 percent APY in USDC rewards. The product initially supports BTC, ETH, and cbETH as collateral.
How the loan mechanics work
A few details are worth understanding for anyone considering using the product. The loans are overcollateralized, meaning users must pledge more crypto than they borrow, which protects the protocol against sudden price drops. If the outstanding loan amount, including accrued interest, climbs to 86 percent of the market value of the pledged collateral, the collateral will be automatically liquidated to repay the loan.
Coinbase has been explicit that it cannot prevent this from happening once the threshold is crossed, so borrowers are expected to actively manage their loan-to-value ratio, the proportion of the loan amount relative to the collateral’s value, particularly during volatile market conditions.
Interest rates are variable, determined by conditions on Morpho’s open lending markets rather than fixed by Coinbase. A one-time fee is charged each time a user borrows, even when adding to an existing loan, and is applied to the principal. That said, the stated rates are positioned as competitive, Coinbase advertises rates as low as 5 percent, which it describes as roughly twice as low as other crypto-backed loan options.
The product operates entirely onchain, meaning the collateral and loan mechanics are governed by Morpho’s smart contracts rather than by Coinbase directly. Coinbase describes its role as providing the interface, a familiar app experience, while Morpho handles the underlying infrastructure.
The company has called this approach “TradFi in the front, DeFi in the back,” traditional finance-style usability layered over decentralized finance plumbing.
A bigger UK ambition
Coinbase has been building toward this moment for over a year. The exchange secured its registration on the Financial Conduct Authority’s crypto register in February 2025, the FCA is the UK’s primary financial regulator, becoming the largest registered digital assets provider in the country in the process. Only about 14 percent of firms that apply for FCA crypto registration succeed, which signals how stringent the process is.
Since that registration, the product expansion has moved steadily. Coinbase launched savings accounts for UK users in November 2025 and followed that with DEX, decentralized exchange, trading in April 2026. Crypto-backed loans are now the latest addition, and the company has indicated that more countries are next.
The US launch, which began in January 2025, shows the scale this product can reach when demand is there. Total loan originations through Coinbase on Morpho grew to over $2.17 billion in USDC as of April 14, 2026, a figure that includes both Bitcoin and Ethereum-backed loans.
Coinbase CEO Brian Armstrong was publicly enthused by the early growth trajectory, describing the adoption charts as “hockey stick growth” and setting a longer-term goal of $100 billion in onchain borrow originations.
The launch also coincides with a broader surge in onchain credit markets, which hit record levels last year. Crypto-collateralized lending reached $73.6 billion in the third quarter of 2025, its highest quarter-end figure ever, according to Galaxy Research.
Competition in the space is heating up too. JPMorgan Chase has plans to let clients use Bitcoin and Ethereum as collateral, with a product targeted for launch by year-end, and stablecoin issuer Tether has made investments in crypto lending platform Ledn.
For UK crypto holders, the value proposition is straightforward, basically accessing liquidity without triggering a taxable sale. In most jurisdictions, selling crypto to cover an expense creates a capital gains event, but borrowing against it does not.
That tax treatment, combined with the flexibility of no fixed repayment schedule, makes the product appealing for holders sitting on long-term positions who need short-term cash. The risk, as with any collateralized loan, is on the downside, a sharp crypto price drop can push a position into liquidation territory quickly, and there’s no grace period when it comes to Morpho’s smart contracts.
The UK launch is also a signal of how seriously Coinbase is treating the market. The country is Coinbase’s largest international market, and the regulatory groundwork laid over the past year appears designed to support a sustained product rollout.