Image Credit: Unsplash
Coinbase has launched crypto-backed loans for UK users, allowing customers to borrow USDC against Bitcoin (BTC), Ether (ETH), and cbETH without selling their holdings. The product is powered by Morpho, an on-chain lending protocol built on Base, and gives users access to USDC inside the Coinbase app.
The launch adds lending to Coinbase’s UK product lineup as the country prepares to bring its broader cryptoasset regulatory regime into force in October 2027. The Financial Conduct Authority (FCA) is still shaping rules for trading platforms, dealing, staking and safeguarding cryptoassets.
The Loans Run Through Morpho on Base
Coinbase said UK users can borrow USDC in under a minute by choosing eligible collateral and selecting how much they want to borrow. For BTC-backed loans, users can borrow up to $5 million in USDC, depending on the amount of Bitcoin they pledge.
The collateral is moved on-chain into a Morpho smart contract, which then releases the USDC loan. Coinbase presents the product through its own app, but the loan is sourced and managed through Morpho’s permissionless lending protocol.
Borrowing Comes with Liquidation Risk
The product gives users liquidity without forcing them to sell their crypto, but it does not remove market risk. Interest rates are variable and can change every few seconds with each new block on Base. There is no fixed repayment schedule, but borrowers can be liquidated if the loan becomes too large compared with the value of their collateral.
Coinbase said users can track loan health, APR history and liquidation alerts inside the app. Its product page also says BTC collateral is converted into Coinbase Wrapped BTC before being transferred into Morpho, then converted back once the loan is repaid and the collateral is withdrawn.
UK Expansion is Part of a Wider Push
Coinbase described the UK launch as the first step in taking its borrowing product beyond the United States. The company said loan originations through Coinbase on Morpho had grown to more than $2.17 billion USDC as of April 14, after the US rollout began in January 2025.
The UK launch also follows Coinbase’s FCA registration in February 2025, along with later UK rollouts for DEX trading and savings accounts. For Coinbase, the launch points to a strategy of adding more financial products before the UK’s new crypto rulebook fully arrives. The product launches ahead of the UK’s new crypto rulebook, which is still being finalized.
