TL;DR
- Coinbase launched USDC lending, offering yields of up to 10.8% annually, compared to the 4.1%–4.5% from its rewards program.
- The service runs on Base and integrates Morpho and Steakhouse Financial vaults; it will roll out in the U.S. (excluding NY), Bermuda, and several markets.
- Deposits start earning interest instantly and can be withdrawn at any time, provided liquidity is available.
Coinbase has introduced a USDC lending service that promises annual yields of up to 10.8%, far above the 4.1%–4.5% the company had been paying through its rewards program.
The integration relies on the Morpho DeFi protocol and vaults managed by Steakhouse Financial, running on Base, Coinbase’s Layer 2 network. The rollout will be gradual across the United States —excluding New York—, Bermuda, and additional international markets including Hong Kong, the United Arab Emirates, New Zealand, the Philippines, Taiwan, and South Korea.
The process is straightforward for users: once they deposit USDC from the app, Coinbase automatically creates a smart contract wallet that connects to Morpho and allocates the funds across different markets to optimize returns.
Users begin earning interest immediately and can withdraw their assets at any time, as long as liquidity is available. Through this setup, the company packages a decentralized finance product into a regulated and familiar interface, making it easier for those who have never interacted with onchain protocols to participate.
The announcement had an immediate impact on the markets. Coinbase shares rose 7%, reflecting positive expectations about the new revenue stream and the company’s ability to bring DeFi to a mass audience.
Coinbase Looks to Capitalize on the Institutional Lending Boom
According to DeFiLlama, Morpho already secures more than $8 billion in assets, making it one of the largest decentralized lenders. Meanwhile, Binance Research reported that DeFi lending activity has grown 72% so far this year in the institutional segment, a sign of growing demand that Coinbase aims to capture with its offering.
USDC continues to gain relevance in the digital economy. With a circulating supply of over $73.6 billion, the stablecoin is consolidating not only as a stable and liquid payment instrument but also as a passive investment option with competitive returns. For millions of users, the shift from a Coinbase-funded rewards program to real lending in decentralized protocols represents a structural change: USDC is evolving into a yield-bearing asset within the crypto ecosystem.
Even so, analysts warn about the risks inherent to DeFi, such as smart contract vulnerabilities, liquidity stress in volatile conditions, and potential counterparty failures. Coinbase is betting that its platform can strike the balance between accessibility and security to mitigate these concerns and drive broader adoption of decentralized credit
