TL;DR
- Milestone: Coinbase hit $1B in Bitcoin-backed on-chain loans via Morpho within eight months, with CEO Brian Armstrong targeting $100B in future originations.
- Mechanics: Loans rely on cbBTC collateral, require a 133% ratio, liquidate at 86% loan-to-value, and feature flexible repayment with dynamic interest rates.
- Expansion: Borrowing limits are rising to $5M, USDC lending with yields up to 10.8% has launched, and Coinbase plans to add more collateral assets soon.
Coinbase has crossed a major milestone in DeFi, surpassing $1 billion in Bitcoin-backed on-chain loan originations just eight months after launching the service in partnership with Morpho. The achievement underscores the rapid adoption of crypto-collateralized lending and highlights Coinbase’s strategy of blending traditional finance accessibility with decentralized infrastructure.
Next goal: $100B in onchain borrow originations.
These adoption charts are what every product manager wants to see: hockey stick growth. The onchain economy is thriving.
Proud of the team for making DeFi more accessible and easier to use. https://t.co/LgqfOacPWQ
— Brian Armstrong (@brian_armstrong) September 30, 2025
Rapid Growth and Ambitious Targets
Launched in January, the on-chain loan program quickly gained traction, generating $130 million in originations within its first few months. By April, Coinbase raised the borrowing limit from $100,000 to $1 million, and the company has since announced plans to expand access up to $5 million in USDC against Bitcoin collateral. CEO Brian Armstrong celebrated the milestone on X, calling the growth “hockey stick” and setting a bold next target of $100 billion in originations.
How the Loan Mechanism Works
When customers initiate a loan, their Bitcoin is converted 1:1 into Coinbase-wrapped Bitcoin (cbBTC) at no fee and transferred to Morpho. The DeFi protocol then issues the USDC loan directly into the borrower’s Coinbase account. Loans must maintain at least a 133% collateral ratio, with liquidation triggered if the loan balance reaches 86% of the collateral’s market value. Interest rates adjust automatically with each block on Coinbase’s Ethereum Layer 2 Base, while repayment terms remain flexible with no deadlines as long as collateral health is preserved.
Regulatory Context and Service Evolution
Coinbase previously offered a retail-focused Bitcoin loan program, which was shut down in November 2023 amid regulatory disputes with the Securities and Exchange Commission. The current model differs by positioning the exchange as an interface provider rather than a direct lender, reducing regulatory exposure. The service is available to U.S. customers, excluding New York residents, and currently supports only Bitcoin as collateral, though the exchange has indicated plans to expand to additional assets.
Expanding Onchain Financial Services
The milestone comes as the exchange continues to broaden its on-chain offerings. In September, the company introduced a feature allowing users to lend USDC on-chain with yields up to 10.8%. Together, these initiatives reflect Coinbase’s strategy to grow alongside the expanding on-chain economy, positioning itself as a central gateway for both retail and institutional users seeking decentralized financial products.
