Coinbase Bitcoin loan has been reinstated, allowing U.S. customers to borrow against their BTC holdings directly with the exchange.
The Coinbase Bitcoin loan service has been relaunched in conjunction with centralized finance lender Morpho. The loans are currently available to U.S. customers, excluding residents in New York due to regulatory restrictions.
Eligible users have the potential to receive funding without having to sell their Bitcoin, retaining their investment and freeing up liquidity tied up in Bitcoin. Borrowers get instant loans in USDC, while the terms and competitive interest rates are set by Morpho's open market lending pool.
One notable feature of the Coinbase Bitcoin loan offer is that collateralized Bitcoin is automatically converted to Coinbase Wrapped Bitcoin (cbBTC) on a 1:1 basis and will stay on-chain on Coinbase, which then serves as collateral via the Morpho protocol. Launched in September, cbBTC makes it possible for users to transfer and use Bitcoin on-chain.
The exchange wants to expand crypto-backed loans to more people, and it will later expand its services outside the United States.