Coinbase offers non-custodial lending and borrowing products to millions of users

Coinbase is the world’s leading regulated crypto exchange, with industry-leading user experiences and over 100 million users. The Coinbase App is gradually becoming the “everything exchange” by offering various financial products, including trading, perpetual futures, staking, and custody.

As part of this evolution, Coinbase saw the opportunity to become the ultimate one-stop shop for financial services by expanding their consumer-facing product suite with new lending and borrowing products for their millions of users.

Coinbase landed on Morpho as the infrastructure to build faster, cheaper, and more transparent financial products that don’t just rival traditional counterparts but provide their millions of users with a far superior experience.

Coinbase leveraged Morpho’s infrastructure to launch Coinbase Loans on Base (Coinbase’s incubated Ethereum L2 network) without building proprietary backend systems from scratch.

This allowed Coinbase to rapidly deploy sophisticated lending products while maintaining complete control over the user experience — from distribution through the Coinbase App to the specific cbBTC/USDC market parameters, with neither Morpho nor other participants able to influence it.

Using Morpho’s unified backend as the foundation, Coinbase tapped into deep liquidity on day one from across the Morpho ecosystem. This allowed Coinbase to offer their customers highly competitive interest rates for borrowing against their BTC without having to originate their own loan book or build any proprietary distribution.

By building onchain with Morpho, everything about the borrowing process is verifiable using Base Scan.

This enables users to track their assets in real time and understand exactly where their collateral is stored and that it is not rehypothecated—a key requirement for building trust in the product.

Coinbase then expanded to the lending side using the same Morpho infrastructure, but this time enabling Coinbase customers to participate on the other side of the market and earn competitive yields by providing liquidity to borrowers.

The user experience remains simple: customers deposit assets and earn rewards immediately. Behind the scenes, deposits flow from Coinbase accounts into Morpho Vaults curated by Steakhouse Financial, then get allocated to markets like cbBTC/USDC where Coinbase customers can borrow these funds, with interest paid going back to Coinbase users lending their USDC.

To abstract away the blockchain complexities, Coinbase developed a suite of tools to ensure a simple tap-and-play experience in line with the rest of the Coinbase App:

• Coinbase Smart Wallet to facilitate onchain transactions.
• Paymaster to allow gas fees to be paid in cbBTC.
• Passkeys to simplify key management and signing of transactions.
• Magic Spend to seamlessly transfer between Coinbase accounts and smart wallets.

Coinbase delivered faster, cheaper, and more transparent lending products that offer the best rates to customers within the familiar Coinbase App interface — users access the best of DeFi without any of the complexities.

Since the full rollout in April 2025, Coinbase’s crypto-backed loan program has originated over $950M in USDC loans, with over $700M currently active. More than $1.4B of cbBTC is now collateralized on Morpho, delivering BTC-backed USDC loans at just 6%—significantly below competing products.

With borrowing and lending on Coinbase both live, Coinbase has built a fully onchain product suite that eliminates the need for users to move assets elsewhere, making Coinbase the primary financial app for their customers.

The best part? The products aren’t isolated—they’re two sides of a market. Users depositing capital to lend their USDC directly fuel the borrowing product, creating organic demand that allows both sides to scale together while delivering better terms by eliminating intermediaries.

These products create a flywheel effect for user engagement. Customers actively monitor their positions while using borrowed funds for real-world expenses, trading and other platform services, driving activity throughout Coinbase’s broader ecosystem.

Coinbase’s Morpho integration represents the largest consumer-facing fintech integration of any DeFi infrastructure to date and serves as a blueprint for other fintechs building “DeFi Mullets” — fintech interfaces in the front, DeFi infrastructure in the back.