Coinbase is broadening its on-chain lending service beyond Bitcoin and Ethereum to include major retail altcoins.
Eligible U.S. users, excluding residents of New York, can now borrow against XRP, Cardano (ADA), Litecoin (LTC), and Dogecoin (DOGE) without selling their holdings.
The move allows users to unlock liquidity while avoiding immediate taxable events that would typically result from selling crypto assets.
How the Lending Infrastructure Works
The lending product is powered by the decentralized Morpho protocol and operates on Base, Coinbase’s Ethereum Layer 2 network. While Coinbase provides the front-end interface, the loans themselves are sourced and managed permissionlessly on-chain through smart contracts.
For the newly added altcoins, users can borrow up to $100,000 in USDC. Higher borrowing limits remain in place for larger-cap assets, with up to $5 million available against Bitcoin and up to $1 million against Ethereum.
In certain cases, Coinbase uses wrapped representations of assets as collateral. For example, cbBTC is used as the collateral asset within Morpho smart contracts rather than native Bitcoin itself.
Risk parameters for the newly added altcoins reflect their higher volatility profile. The maximum Loan-to-Value (LTV) ratio is set at 49%, with a liquidation threshold of 62.5%. This means borrowers face liquidation if collateral value declines significantly relative to the borrowed USDC.
Market Context and Financial Scale
Since launching in January 2025, Coinbase’s on-chain lending service has issued more than $1.9 billion in cumulative loans. The expansion to XRP, ADA, LTC, and DOGE follows a period of heightened market volatility and a wave of liquidations earlier in February 2026.
By adding these assets as eligible collateral, Coinbase is widening access to liquidity for retail-heavy tokens that often experience sharp price swings during broader market corrections.
Structurally, the update reinforces Coinbase’s strategy of blending centralized user experience with decentralized credit infrastructure. Rather than operating as a traditional balance-sheet lender, the platform routes demand into on-chain liquidity pools, reducing direct counterparty risk while maintaining regulatory boundaries.
The addition of these four assets signals that on-chain borrowing is moving beyond Bitcoin and Ethereum into the broader altcoin market, positioning DeFi-powered lending as a more integrated feature of mainstream exchange platforms.
