Coinbase is pushing deeper into onchain finance with the launch of Ethereum-backed loans for eligible U.S. customers, a move that lets users borrow up to $1 million in USDC without selling a single unit of ETH. The rollout marks one of the exchange’s most significant DeFi-integrated services to date, arriving just weeks after it raised its Bitcoin-backed loan limit to $5 million.
The program is powered by Morpho, a lending protocol operating on Base, Coinbase’s own Layer 2 network. Coinbase acts as the access point, but the loans themselves are executed entirely through Morpho’s smart contracts, meaning users interact with DeFi liquidity while enjoying a centralized platform’s ease of use.
If you believe in somΞTHing, this one's for you.
ETH-backed loans are here.
You can borrow USDC against your Ethereum, unlocking liquidity without selling.
Available now in the U.S. (ex. NY). pic.twitter.com/eOvJ2BWPfr
— Coinbase 🛡️ (@coinbase) November 20, 2025
How The New ETH Loans Work
The offering is available across most of the United States, with the exception of New York due to regulatory restrictions. Users deposit ETH as collateral and receive USDC without triggering a taxable event, a key advantage over selling Ethereum outright. Borrowers must monitor their loan-to-value ratio, as positions are automatically liquidated once they hit 86% LTV, reflecting the inherent volatility of crypto-backed credit.
Coinbase says the feature will soon expand to include more assets, including cbETH, the platform’s staked-ETH derivative, giving users even more flexibility to leverage long-term holdings.
Base Hits New Lending Milestone
The timing of the launch is no coincidence. Onchain lending across the Base ecosystem has now exceeded $1.25 billion, driven by rising activity in both institutional and retail credit markets. Morpho, in particular, has seen significant inflows this week as traders and long-term holders tap collateralized borrowing to unlock liquidity without sacrificing upside exposure.
With Coinbase leaning harder into DeFi rails and expanding ways for users to borrow against major cryptocurrencies, the exchange is positioning itself at the center of the next phase of crypto-native credit markets.