Crypto · updated 1h ago · 2 min read
Coinbase Launches Fixed-Rate USDC Loans Backed by Bitcoin Through Morpho Midnight
Coinbase now offers fixed-rate USDC loans secured by BTC through Morpho Midnight. Interest rate and repayment date are fixed at loan origination.
13 outlets told this the same way.
9 of 11 outlets skipped it: midnight currently holds about $30m in deposits during rollout.
13outlets compared
CoinDesk emphasises mainstream consumer impact and macro context, while The Block spotlights protocol and product mechanics. Most other outlets sit in between.
Fixed-rate USDC on Base
Coinbase rolled out fixed-rate, bitcoin-backed USDC loans that let users borrow the USDC stablecoin against their bitcoin with an interest rate and repayment date set at origination. Coinbase said the fixed-rate offering runs on Morpho Midnight, a decentralized, non-custodial lending protocol for fixed-rate and fixed-term crypto loans launched in July, and it settles transactions on Coinbase’s Ethereum layer 2 network Base. Coinbase positioned the new product as an alternative to its floating-rate lending, with Morpho Blue loans that have more than $1.4 billion in active loans backed by nearly $3 billion in collateral.
Morpho co-founder and CEO Paul Frambot said, “We’re now building on that foundation and starting to scale: new loan types and use cases, bringing onchain credit one step closer to the scale and diversity of global credit markets,” as Coinbase expanded its onchain borrowing options. The announcement also tied the move to the bitcoin-backed credit market, which it said is currently sized at roughly $16 billion, according to the Bitcoin Digital Credit Report compiled by Apyx and BitcoinTreasuries.net.
Defined terms, set maturities
Coinbase set the terms at the time a loan is taken out, and it described the fixed-rate structure as giving users greater certainty over the cost and duration of borrowing. Coinbase’s product uses Morpho Midnight on Base, while Coinbase’s existing variable-rate borrowing uses Morpho Blue, where rates change based on demand and supply conditions. Coinbase spokespersons and company materials said borrowers must repay before maturity, and they said the “End of Month” date refers to the last Friday of the selected month.
Jacob Frantz, Coinbase’s yield and investments product lead, said, “Coinbase Borrow gives our customers access to liquidity without having to sell their assets, and fixed-rate borrowing gives them even greater choice over how they manage that credit,” in connection with the new option. A Morpho spokesperson told The Block that Midnight has around $30 million in deposits as it rolls out, while Morpho Blue has $5.2 billion in outstanding loans and $16 billion in deposits across all integrations.
Integration momentum and scale
Coinbase’s fixed-rate loans arrived as other crypto lending and infrastructure integrations expanded, with CoinMarketCap describing Morpho’s 3.5 percentage point surge over the past 22 hours as tied to Coinbase and Circle integrations. CoinMarketCap said Coinbase’s introduction of fixed-rate, fixed-term bitcoin-backed USDC loans powered by Morpho Midnight on Base provided Morpho with a new retail distribution channel. CoinMarketCap also described Coinbase’s Developer Platform “Borrow” routing into Morpho Blue on Base, saying the API feature allows third-party apps to open and manage crypto-backed USDC loans through Coinbase’s APIs.
CoinMarketCap further said Circle launched Digital Asset-Backed Borrowing (DABB) using Morpho as the first supported lending protocol, with eligible institutional Circle Mint users depositing BTC, minting wrapped cirBTC, and borrowing USDC through a Morpho lending market on Arc and Ethereum. DiarioBitcoin said the Coinbase launch of BTC-backed fixed-rate loans via Morpho Midnight was the dominant catalyst behind Morpho’s move, and it reported Morpho trading at USD 2.61 after a 6.21% intraday drop.