Coinbase offers noncustodial lending and borrowing products to millions of users

Coinbase is one of the world's leading regulated crypto exchanges, with 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 chose Morpho as the credit network to launch crypto-backed loans on Base without building proprietary backend systems from scratch: faster, cheaper, and more transparent products that provide their millions of users with a far superior experience.

Coinbase kept complete control over the user experience, from distribution through the Coinbase App to the parameters of each isolated market. What began with cbBTC/USDC has since expanded to nine collateral markets, adding ETH, XRP, SOL, ADA, DOGE, and LTC.

Because everything runs onchain, the borrowing process is verifiable on BaseScan: users can track their assets in real time and see exactly where their collateral is held, and that it is not rehypothecated.

Coinbase then expanded to the lending side on the same Morpho credit network, so users can earn variable yields by lending their USDC. There are two options. The Core USDC vault generates yield by lending USDC to borrowers who secure their loans with blue-chip crypto assets such as BTC or ETH. The High Yield USDC vault, launched in June 2026, lends USDC against a range of dynamic collateral, including assets powered by Ethena, where borrowers typically pay a premium.

The user experience stays simple: users deposit USDC and start earning yield right away. Behind the scenes, deposits flow into Morpho Vaults curated by Steakhouse Financial and get allocated to the same markets where Coinbase users borrow. Borrower-paid interest accrues back to the users lending their USDC.

To abstract away the blockchain complexities, Coinbase built a suite of tools that keep the experience in line with the rest of the Coinbase App: Coinbase Smart Wallet for onchain transactions, Paymaster so gas fees can be paid in cbBTC, Passkeys to simplify key management and signing, and Magic Spend to move funds between Coinbase accounts and smart wallets.

Coinbase has built a fully onchain credit suite inside the familiar Coinbase App. The two products are two sides of the same market: USDC supplied by lenders funds crypto-backed loans, so each side grows the other.

With Coinbase's trusted interface in the front and Morpho's open credit network in the back, the products have scaled quickly since the full rollout in April 2025:

• $3B+ in USDC loans processed since launch, with $1.3B+ currently active across nine collateral markets against $3B+ of collateral
• $500M+ in active lending deposits across the Core and High Yield USDC vaults
• $280M+ supplied into the High Yield USDC vault in its first two months, now the fastest-growing side of the integration